There’s been lots of talk among Bitcoin (BTC) enthusiasts online about a potential 1% wealth tax for large-holders of the cryptocurrency. This isn’t confirmed yet, but a letter to US President Joe Biden has fueled speculation and sparked significant interest.
Rumored 1% wealth tax on crypto
A false letter, believed to be penned by Senator Elizabeth Warren, focuses on regulating cryptocurrency deals made by significant investors, commonly called “whales.” The ensuing legislative plan aims to tackle the regulatory issues that emerge as cryptocurrencies become increasingly popular.
Individuals and corporations with cryptocurrencies worth over $1,000 are suggested by the proposal to report these holdings annually to the Internal Revenue Service (IRS). Additionally, the bill proposes a 1% wealth tax on entities possessing digital assets valued above $500,000.
Certain people expressed the view that imposing a 1% tax might be the government’s attempt to control the Bitcoin market and shield it from price manipulation by large investors or “whales.”
Despite being labeled as untrue, the bill aims to tackle increasing disparities in the US. As suggested in the legislation, those with significant crypto wealth will be required to make contributions towards funding public services and infrastructure.
Understanding crypto tax in U.S.
In simpler terms, according to U.Today’s previous report, the Internal Revenue Service (IRS) in the United States categorizes cryptocurrencies as capital assets. This means that any profits or losses derived from buying, selling, or swapping crypto are considered capital gains or losses.
In the year 2021, the Biden administration unveiled a tax plan intending to boost the capital gains tax rate up to 43.4% for individuals earning more than $1 million. This plan sparked significant controversy. Notable venture capitalist Tim Draper voiced concern, warning that it might endanger “America’s golden goose.”
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2024-04-22 18:11