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According to the U.S. State Department, the administration of U.S. President Joe Biden is proposing a sales tax on cryptocurrency miners equal to 30% of the cost of the electricity they use, and tax breaks related to crypto wash trading. We have a plan to eliminate possible losses. of Treasury Department documents released Thursday.
See related articles: CFTC Chairman Calls Ethereum A Commodity In Contrast To SEC Chairman Gensler’s Position
quick facts
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The Treasury Department said all businesses that use computing resources (either owned or borrowed) to mine digital assets will be subject to a 30% tax. This will be introduced over three years in annual increments of 10% starting December 31, 2023.
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“Increased energy consumption resulting from the growth of digital asset mining has a negative impact on the environment, impacting environmental justice as well as potentially increasing energy prices for those who share the electricity grid,” said the Treasury Department. said.
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According to the White House, the estimated global power use of crypto-assets is between 120 billion and 240 billion kilowatt-hours per year, a range that exceeds Australia’s annual power use.
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President Biden’s fiscal 2024 budget also included a proposal to apply a “wash sale rule” to digital assets to close tax loopholes. Wash trading for tax purposes refers to an investor selling a financial instrument at a loss, claiming a deductible, and then immediately buying it back.
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Since digital assets are not classified as securities, crypto traders can claim tax deductible losses against losses and buy back tokens immediately, while stock and bond traders can buy back the same security for 30 days. is prohibited.
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According to the White House, the United States plans to apply the same restrictions to cryptocurrencies starting December 31, 2023, potentially raising $24 billion by fixing loopholes.
See related articles: Why Global Coordination On Crypto Regulation Matters Most
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