Biden Opposes Crypto Trader Benefits

The President of the United States, Joe Biden, voiced opposition to a debt ceiling agreement with Republican leaders that allegedly would benefit cryptocurrency traders.

During a press conference while attending the Group of Seven (G7) Summit, Biden reportedly described Republican proposals as “unacceptable.”

“I’m not going to agree to a deal that protects wealth tax cheats and crypto traders while putting food assistance at risk for nearly 1 million Americans.”

The purported protections for crypto traders refer to the harvesting of tax losses.

According to the Washington Post, the White House and Republican leaders are currently discussing blocking the mechanism for cryptocurrency transactions.

Tax-loss harvesting for cryptocurrencies is a technique investors use to reduce their overall tax liabilities. It entails selling a cryptocurrency at a loss to offset capital gains from cryptocurrency profits.

To claim a loss, the assets must be sold, and the proceeds must be used within 30 days before or after the sale to purchase a similar investment.

Additionally, the mechanism is available for stocks and other assets. Alongside a proposal to prohibit investors from deferring taxes on real estate swaps, the White House proposed to Republicans an end to tax loss harvesting for crypto.

Both changes would generate an additional $40 billion in tax revenue for the United States government. A source told the Washington Post that Republicans reject the proposals.

The increase in U.S. debt, according to House Speaker Kevin McCarthy, is a “spending problem, not a revenue problem,” citing the Biden administration’s excessive spending during the pandemic.

In the meantime, the White House attributes the debt crisis to tax cuts enacted by previous administrations, claiming that tax cuts have had a significant impact on revenue.

Republicans want to eliminate the deficit through spending cuts totaling $4.8 trillion, which would directly impact the budgets of federal agencies.

The U.S. could default as early as June 1 if Congress fails to raise the debt ceiling. According to reports, Biden will call McCarthy during his flight from Hiroshima to Washington, D.C.

Since 1917, the debt ceiling has been the maximum amount of money the federal government can borrow to pay its bills.