Biden calls to end $18B 'crypto tax loopholes' —community begs to differ
United States President Joe Biden recently shared an infographic on Twitter, calling to end “tax loopholes" that allegedly help wealthy crypto investors. Members of the community responded to the tweet, questioning the figures shared by the president and if the said loopholes do exist.
Cutting such loopholes would save about $18 billion according to Biden. However, the president did not provide any information as to which loopholes existed and what types of reforms would lead to the potential savings amount that the president shared.
We don’t have to guess what MAGA House Republicans value. They’re telling us. pic.twitter.com/BM6JGMEFeq
— President Biden (@POTUS) May 9, 2023Cutting such loopholes would save about $18 billion according to Biden. However, the president did not provide any information as to which loopholes existed and what types of reforms would lead to the potential savings amount that the president shared.
Pseudonymous crypto researcher FatMan responded saying that Biden's "facts are off." The crypto analyst highlighted that the crypto market shrank by $1.4 trillion in 2022 while corporate profits in the U.S. were at $11.8 trillion. “The crypto market is both much smaller & fell heavily. We both know where the loopholes really are,” FatMan tweeted.
Dogecoin co-founder Billy Markus also replied to Biden's tweet. Markus asked which loopholes existed and claimed that he gave the government more money than what he made in crypto, "while taking all the risk." Markus then proceeded to point out that most American crypto users are not rich but are trying to use it because they do not have enough.
Meanwhile, another community member was seemingly frustrated, calling out the administration for going after crypto while receiving funding from the former FTX CEO Sam Bankman-Fried.
Community member asking President Biden to give back the money received from FTX. Source: TwitterWhile others are unsure of what crypto tax loopholes the president is tweeting about, Redditors theorized that it may be the Internal Revenue Service (IRS) wash sale rule, which prohibits selling securities at a loss and reacquiring it within 30 days, not being applied to crypto yet.
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An example of this would be MacroStrategy’s move to sell Bitcoin back in December. On Dec. 21, MicroStrategy’s subsidiary MacroStrategy sold 704 Bitcoin (BTC) at an average price of $16,776 per BTC. The company also highlighted its intent to reduce its tax bill.
On Jan 3, tax attorney and CPA Selva Ozelli broke down the sale and explained that it’s a common strategy called tax-loss harvesting, where investors choose to reduce capital gains by selling their digital assets at a loss.
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