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Biden’s plans for the US economy include tax regulations on the crypto market

Photo of: Joseph Stone
by Joseph Stone

When it comes to digital currencies, it seems that everything is cyclical, even legislation. The summer of 2021 will be one of regulations for digital assets and crypto businesses. Indeed, regulators around the world have been cracking down on the cryptosphere for several weeks now. Whether it’s the Financial Action Task Force (FATF), the European Commission, or even the countries themselves, everyone seems to want to harden their stance on Bitcoin and cryptos. The last time we saw this much hype about cryptocurrency oversight was during the 2017 bull run.

As part of his economic stimulus package, President Biden designed a massive infrastructure plan. The goal of this plan is to help the economic recovery by renovating the existing infrastructure. The plan includes the creation and renovation of bridges, roads, railroads, but also the construction of green infrastructure such as electric vehicle charging stations.

U.S. senators agreed on July 28 to a $550 billion investment plan. The new agreement significantly changes the way infrastructure spending will be funded after Republicans objected to a pillar of the original framework: increased revenue from IRS tax enforcement.

Instead, negotiators agreed to reallocate more than $250 billion from previous crisis relief legislation, including $50 billion from increased unemployment benefits that were prematurely canceled this summer by two dozen Republican governors.

In addition, the latest iteration of the bill calls for new reporting requirements for cryptocurrencies and increased crypto taxes. The increased regulations could bring in as much as $28 billion. Under the proposed measures, cryptocurrency brokers and exchanges would be subject to increased reporting requirements. Under the legislation, all businesses sending or receiving digital assets in excess of $10,000 will have to report these transactions to the Internal Revenue Service (IRS).

Joe Biden is ready to enact new tax regulations, which include changes to the capital gains tax that could affect thousands of crypto-traders in the country. Under these plans, the state would double the capital gains tax rate to 39.6% for those earning more than $1 million.

However, some see this as an opportunity to buy cryptocurrencies at a good price, while other experts believe the plan may never see the light of day due to opposition from the House of Representatives.

In any case, capital gains tax concerns were already pressing for American crypto enthusiasts, who faced dilemmas related to selling: investors often have to pay capital gains tax when selling crypto-currencies (in fiat currency) held for more than a year.