President Joe Biden has proposed a new budget that includes an increase in the capital gains tax and a targeted effort to combat crypto wash sales. This proposal is part of the President’s larger plan to reduce income inequality and to raise revenue for the federal government.
The capital gains tax is a tax on profits made from selling investments such as stocks, bonds, and real estate. Currently, the capital gains tax rate is 20% for those making more than $441,450 in taxable income. Under President Biden’s proposal, the capital gains tax rate would be increased to 39.6% for those making more than $1 million in taxable income. This would raise an estimated $372 billion over the next 10 years.
In addition to increasing the capital gains tax rate, President Biden’s budget also includes a targeted effort to combat crypto wash sales. A crypto wash sale occurs when an investor sells a digital asset at a loss and then quickly buys it back in order to claim a tax deduction. This practice is illegal and can result in significant penalties for those caught engaging in it. The Biden administration is proposing to increase enforcement of this practice and to provide additional resources to the Internal Revenue Service (IRS) to help identify and prosecute those who engage in it.
Overall, President Biden’s proposed budget is aimed at reducing income inequality and raising revenue for the federal government. The increased capital gains tax rate and targeted effort to combat crypto wash sales are two key components of this plan. While these measures may not be popular with some investors, they are necessary steps to ensure that everyone pays their fair share of taxes and that the government has the resources it needs to provide essential services.
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- Source: Plato Data Intelligence: PlatoAiStream