Sen. Cinzia Lummis (R-Wyo.) on Tuesday expressed concern about a tax proposal that appears in the White House’s draft 2025 budget.
What happened: He said the government was apparently optimistic about cryptocurrencies, but warned of the dangers of a heavy tax.
“The White House budget for 2025 is incredibly bullish on cryptocurrencies, some might even say they believe they will go to the moon. But a proposed punitive 30% tax on digital asset mining would destroy any foothold that the industry has in America,” Lummis said in an X post.
President Joe Biden’s The proposed budget for the next fiscal year, announced Monday, sets new rules that could impact the cryptocurrency industry.
Within the “General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals,” a document published by United States Department of the Treasury, the administration has recognized the inadequacy of current laws as they relate to digital assets. His solution is to implement an excise tax, which is typically imposed on physical goods.
The tax would be set at 30% of electricity costs incurred by companies mining digital assets.
Under the proposed regulation, mining companies would be required to report details of their electricity consumption. For companies that purchase electricity externally, the value of the purchased energy should be made public. Likewise, mining operators who rent computing power must declare the cost of electricity determined by the lessor, which will serve as the basis for the new tax.
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Because matter: At the heart of the budget are measures aimed at cryptocurrencies, such as the enforcement of wash sale rules, designed to prevent investors from claiming tax benefits on securities sold at a loss and then quickly bought back. “The Budget saves billions of dollars by closing other tax loopholes that overwhelmingly benefit the wealthy and the largest, most profitable corporations,” the proposal reads.
Addressing the complexities of wash trading in the cryptocurrency domain, a fact sheet published alongside the budget explains: “A cryptocurrency investor – unlike a stock or bond investor – can sell a cryptocurrency at a loss, suffer a substantial tax loss to reduce taxes. burden, and then buy back the same cryptocurrency the next day.”
Price action: At the time of writing, Bitcoin Bitcoin/USD it traded at $72,075 up 0.46% in the past 24 hours, according to Benzinga Pro data.
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