As per recent development, Biden has shown disapproval over a debt ceiling agreement with Republican leaders that would apparently benefit crypto traders. During the G7 summit in Hiroshima, Japan, Biden called the proposed terms of the Republicans highly unacceptable. Biden mentioned how he would not agree to a deal that plays a role in protecting tax cheats and crypto traders while putting food assistance at risk for almost a million Americans.
Currently, it is believed that the alleged protection of crypto traders points to tax-loss harvesting. As of now, the White House and some Republican leaders are in the middle of an ongoing discussion regarding blocking the mechanism for cryptocurrency transactions. The tax-loss harvesting strategy can simply be defined as a strategy that investors use to drastically reduce their tax liabilities. This involves selling a certain cryptocurrency at a loss to offset capital gains from crypto profit.
When it comes to claiming a loss, the assets must be sold and the amount received from the sale must be utilized to purchase a similar asset within the next 30 days. However, the strategy is currently available for both stocks and a countless number of other assets.
The Biden Administration Continues Making Moves on the Field of Crypto
Apart from ending tax-loss harvesting for cryptocurrencies, Biden proposed a similar proposal to the Republicans that would restrict investors from deferring taxes on real estate swaps. Both of these changes, combined, would add approximately $40 billion in tax revenue for the Biden government.
Bided stated,
“And I’m not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistance at risk for nearly a hundred — excuse me — nearly 1 million Americans. And it’s time for Republicans to accept that there is no bipartisan deal to be made solely — solely on their partisan terms. They have to move as well.”
According to a number of sources, it had come to light that the Republicans ended up rejecting both of these proposals. The House Speaker, Kevin McCarthy, claims that the reason for the overall US debt increase is the result of the spending problem and not the revenue problem. The statement pointed fingers towards the increased spending of the Biden administration during the pandemic.
On the other hand, the White House claims that the debt issue resulted from the tax cuts of previous administrations, claiming that tax revenue had been greatly affected. Republicans are actively seeking to close the deficit with almost $4.8 trillion in spending cuts, which would inevitably affect the budgets of federal agencies. Similarly, if Congress fails to raise the debt ceiling, the probability of the US defaulting soon would rapidly increase. It is believed that Biden would talk to McCarthy on his flight back to Washington from Hiroshima.
