capital gains

Report: Biden Seeking To Nearly Double Capital Gains Taxes For Wealthy Americans

27/04/2021 by Idelto Editor

Report: Biden Seeking To Nearly Double Capital Gains Taxes For Wealthy Americans

President Joe Biden is considering raising the U.S. capital gains tax rate by nearly double for the wealthiest Americans to pay for agenda items, according to Newsweek. Naturally, any raise in capital gains taxes would have significant impact on bitcoin investors that have seen the value of their assets rise exponentially in recent years.

According to Newsweek, the tax increase seeks to help fund Biden’s American Families Plan, a proposal set to be finalized and presented sometime this week. It aims to allocate “$1.5 trillion in new spending and tax credits meant to fight poverty, reduce child care costs for families, make prekindergarten and community college free to all, and establish a national paid leave program,” reported The New York Times.

An analysis recently published by the Tax Foundation further analyzed how the new federal tax rates could play out at the state level. It shows that “[rates] would be even higher in many U.S. states due to state and local capital gains taxes, leading to a combined average rate of 48 percent compared to about 29 percent under current law.”

If enacted, “Biden’s plan would be the highest tax rate on investment gains since the 1920s,” per Newsweek.

Naturally, such a high capital gains tax rate would influence taxpayers’ decisions regarding when to sell their assets and in which state they choose to live. According to the Tax Foundation, if enough taxpayers decide not to realize gains and avoid the new tax rate, Biden’s move could backfire, resulting in less federal revenue altogether.

Although traditional investors might avoid the tax increase for some time, Bitcoiners are in a unique position. They might see Biden’s potential plan as the ultimate incentive for not selling their bitcoin and not realizing any capital gains.

Already accustomed to the “HODL” motto, Bitcoiners would be more incentivized than ever to hold on to their bitcoin until hyperbitcoinization, at which point the IRS would cease to exist as the USD is replaced by a Bitcoin standard. And, until then, if they ever need some dollars, they can loan a small portion of their bitcoin stack for a fee, rather than selling it and incurring tax obligations.

Joe Biden’s Proposal to Double Capital Gains Tax Rate Shakes Financial Markets

23/04/2021 by Idelto Editor

Joe Biden's Proposal to Double the Capital Gains Tax Rate Shakes Financial Markets

The Biden administration has revealed plans to raise taxes on investors who are millionaires according to a flurry of recent reports. President Joe Biden wants to overhaul the U.S. economy in order to help fund American childcare and education. Biden’s proposal will almost double the current capital gains tax rate from 20% to 39.6%, and for some investors, the tax rate could be as high as 43.4%.

Biden’s Capital Gains Tax Rate on Wealthy Individuals Could Climb as High as 43.4%

Fresh off the heels of proposing new stimulus in order to bolster the American economy, President Joe Biden is also planning to increase the tax rate on wealthy individuals with $1 million or more. The increased capital gains tax will jump to near double for some individuals and possibly even 43.4%.

Every report disclosing the capital gains matter stems from people who are familiar with the proposal but wish to remain anonymous. Currently, U.S. capital gains taxes are around 20% and the marginal rate of 39.6% is meant to be applicable to wealthy Americans.

Proposed capital gains tax increase?

I hear Puerto Rico is nice this time of year…

— Jameson Lopp (@lopp) April 23, 2021

Further, the 3.8% tax on capital gains will also be tethered to the 39.6% in order to bolster Obamacare funding. Biden started talking about overhauling the tax code in more depth during the first week of April, as his administration hopes to raise $2.5 trillion in revenue during a 15-year span.

On Thursday afternoon while stock markets were open, traders started to sell off stocks and bonds. Ten-year Treasury fell and stocks like the S&P 500 Index saw some losses as well on Thursday but stocks and bonds rebounded Friday morning.

Bitcoin (BTC) and a number of crypto assets took some losses as well after the tax news began to spread. On Thursday, BTC fell from a high of $55,186 per unit to a low of $47,555 at 3:45 a.m. (EST) on Friday. BTC is currently trading just below the $50k range and the only crypto asset that did not get routed was ethereum (ETH). Jeffrey Halley, senior market analyst, Asia Pacific, at OANDA noted that BTC’s slide in value stemmed from Biden’s tax overhaul proposal.

“Bitcoin headed South today after President Biden signaled that he wanted to raise capital gains tax in the U.S.,” Halley explained on Friday. “Now whether that happens or not, many bitcoin investors are probably sitting on some substantial capital gains if they stayed the course over the past year. “I firmly believe that developed market regulation and/or taxation remain the crypto markets’ Achilles Heel.”

Since Thursday’s revelations about the tax hike went viral, the crypto economy has rebounded a hair as well, but many digital assets haven’t fully regained all the losses.

“We can most likely attribute bitcoin’s sharp decline to the fact that U.S. investors are facing a capital gains tax if they sell the cryptocurrency after holding it for more than a year amidst reports that President Biden is contemplating doubling this for the wealthy,” Don Guo, CEO at Broctagon Fintech Group told Bitcoin.com News in an email. “Further, investors will see the price drop across the crypto market as an opportunity to widen their portfolio by averaging up their investment outlay and buying in new altcoins such as ethereum,” the executive added.

Guo further commented:

Therefore, likewise for bitcoin, a further drop is unlikely as the big conglomerates will see it as an opportune moment to make their entry in acquiring bitcoin while prices are relatively low.

White House Press Secretary Says Plans Are Still Being Finalized

President Biden revealed his efforts to up the capital gains on wealthy individuals while campaigning. Individuals who are against the idea have complained that a million dollars doesn’t necessarily make a person ‘wealthy’ these days. Detractors have said that this will place a burden on people who don’t have much wealth and the extremely rich will simply find loopholes. White House Press Secretary Jen Psaki discussed the tax reform during her briefing on Thursday with a quick response to a reporter’s question.

“We’re still finalizing what the pay-fors look like,” Psaki told the press. Meanwhile, Republicans are fighting for the tax cuts imposed by former President Trump and may try to stop the proposal in its tracks. The Biden administration also wants to increase the estate tax for wealthy individuals as well. Americans making $400k or more annually could pay more on estate taxes in order to help pay for the “American Jobs Plan.”

What do you think about Joe Biden and his administration looking to increase capital gains for those who have $1 million or more? Let us know what you think about this subject in the comments section below.

Bitcoin Proponents Bemoan Joe Biden’s Proposed Capital Gains Hike

20/10/2020 by Idelto Editor

The U.S. presidential election is only 14 days away, and a number of bitcoin proponents have been discussing the capital gains tax implications Joe Biden plans to invoke if he wins the American presidency. According to Biden’s plan, capital gains will be raised from 21% to 39.6% for certain income brackets. Two weeks ago, the current U.S. president, Donald Trump, floated the idea of cutting long-term capital gains cut down to 15%.

In just two weeks, the U.S. may see a new president or it may get another four years of Donald Trump if the incumbent wins the election. This week a number of people have been discussing what taxes will be like in the U.S. if Joe Biden was elected president.

For instance, hip-hop mogul 50 Cent tweeted that he was going to vote for Trump after seeing how Biden plans to tax wealthy individuals in New York. Additionally, a number of bitcoiners have been discussing Biden’s tax increases and the direct form of taxation known as capital gains.

When people discuss the term “capital gains tax,” they are talking about the levy taken by the state when someone makes gains on the sale of any asset after the original purchase. Long-term capital gains apply to levies taken by the state after the asset is retained by the owner for more than 12-months.

Biden’s economic plan is a classic hit from the Dems… pic.twitter.com/FPiKlezqzB

— Bitcoinerisms – Buy Bitcoin (@BitcoinCensus) October 20, 2020

The popular crypto pundit, Mike in Space, discussed 50 Cent’s commentary on Twitter and said: “Come election day, a lot of people are going to realize they prefer not going broke to being woke.”

Another individual on Twitter this week is also disgusted with Biden’s tax proposals and stressed:

Biden wants to raise the capital gains tax significantly. This screws over the majority of seniors who live on fixed income. It also impacts anyone taking profits from bitcoin or any investments for that matter.

According to Biden’s tax plan, the long-term capital gains taxes for individuals who make $1 million per year or above will increase from 21% to 39.6%. Making matters worse, some reports show Biden’s proposal could increase capital gains taxes as high as 43.4% because of an added 3.8% payroll tax. However, even though online fact-checkers and mainstream media outlets try to claim that the income bracket proposal is concrete, the Biden tax plan is not 100% set in stone.

In fact, The Hill contributor Naomi Jagoda’s recent report notes that Biden has “repeatedly said” that the increased taxes and capital gains hike will not affect certain income brackets (under $400k to $1M). However, Jagoda’s report also implies that Biden’s tax proposal has not yet been “tailored to meet that objective.” The fact of the matter is Americans cannot take any politician’s promises seriously, and Biden could change the capital gains requirements on a whim.

On Facebook, Openbazaar and BCHD developer, Chris Pacia, complained about Biden’s capital gains hike proposal. “Really getting tired of Joe Biden claiming he won’t raise taxes on ordinary people,” Pacia wrote. “His capital gain tax increase from 23.5% to 43.4% would directly hit my life savings. It’s complete bullsh*t to claim he isn’t taxing ordinary people.”

Meanwhile, a team of Goldman Sachs analysts led by Arjun Menon wrote a note to investors saying that Biden’s capital gains hike could also spark a massive stock sell-off. Goldman’s investors note detailed that the last time the capital gains taxes were increased in 2013 it fueled a massive $100 billion stock sell-off.

On Twitter, a number of other cryptocurrency investors have expressed dissatisfaction with Biden’s proposed capital gains increase.

“If you’re invested in crypto or stocks and you’re voting for Biden, you need to re-evaluate your life decisions,” one individual wrote. “Biden is going to raise capital gains tax from 23.8% to 43.4%,”

Another bitcoiner wrote how it was a toss-up between Trump and Biden for different reasons. “Trump doesn’t like bitcoin,” the individual said. “Biden will probably raise taxes on capital gains. IDK…”

Many progressives wholeheartedly believe that Biden’s plan will only affect rich people. However, Biden supporters don’t realize that due to the Federal Reserve’s reckless inflation creation, the income bracket between $400k and $1 million could represent a lot more people in the very near future.

For example, the average American income in 1979 was $16,530 and it only took two decades to increase 431.54% thanks to rapid inflation. In 2020, the average American income of $87,864 only needs to jump 355% in order to meet Joe Biden’s $400k tax requirement.

Mainstream media has been attempting to publicize Donald Trump’s tax plan, but the incumbent president has yet to release any official tax proposal details thus far. Although, people predict that Trump aims to cut the current capital gains tax, as the president made a pledge on August 13 to cut the top federal tax for capital gains down to 15%.

What do you think about Joe Biden’s proposed capital gains hike? Let us know what you think in the comments section below.

The post Bitcoin Proponents Bemoan Joe Biden’s Proposed Capital Gains Hike appeared first on Bitcoin News.

South Korea to Start Taxing Bitcoin Profits in 2021

29/05/2020 by Idelto Editor

South Korea will start taxing profits from bitcoin (BTC) and other cryptocurrencies next year, according to local media reports.

The taxation will also apply to bitcoin mining operations and income from initial coin offerings, should it be approved by Parliament.

South Korea’s Ministry of Economy and Finance proposed the amendments to the existing tax law to include the cryptocurrency industry, with backing from the Ministry of Information and Technology.

In September, the Ministry will table the amendments before Parliament. Once approved, the law will enter into force in 2021, allowing authorities to tax profits generated from the sale of digital assets for cash. Trades between cryptocurrencies will remain tax-free, and similarly those sold at a loss.

“We are reviewing capital gains tax or other income tax on profits gained by domestic and foreign investors in the transfer of virtual assets,” an official from the Ministry of Strategy and Finance was quoted as saying.

“The proposed tax amendment will be announced in July and submitted to the regular assembly in September,” the official added. The planned changes have been prompted by the idea of applying “tax where income is located”, officials said.

The Korean government has attempted to tax bitcoin in the past, most recently in January, but failed to enforce the regulations, reportedly because different government ministries could not agree whether bitcoin was an asset or not. Local crypto experts believe the proposed amendments will suffer the same fate.

Seung Seung-young, a researcher with the Korea Regional Tax Institute, told local newspaper E Daily that the planned law is not watertight in its current format, opening it to exploitation by investors. He opined:

“If you do business through a peer-to-peer transaction without going through an exchange, there is a possibility of avoiding taxation. Even with IP tracking, if there are a large number of targets, administrative costs will increase and it will be difficult to track each day.”

Kim Yong-min, chairman of the Korea Blockchain Association, notes that it will take three to four years before the government can set up infrastructure that truly understands cryptocurrency.

What do you think about South Korea’s proposed tax on Bitcoin? Let us know in the comments section below.

The post South Korea to Start Taxing Bitcoin Profits in 2021 appeared first on Bitcoin News.

Spain’s Tax Authority Sending Notices to 66,000 Cryptocurrency Owners

02/04/2020 by Idelto Editor

The Spanish tax authority has reportedly started sending notices to about 66,000 cryptocurrency owners in the country. This number represents a massive increase from the 14,700 tax letters the agency sent to crypto owners last year. The letters will continue to be sent until the end of June despite the coronavirus crisis Spain is facing.

Also read: 2x Bitcoin — Wanna Double Your BTC to the Moon? Forget About It

Tax Authority Sending Letters to Crypto Owners

Despite the coronavirus pandemic and rising death toll, the Spanish tax authority, the Agencia Estatal de Administración Tributaria (AEAT), has started a campaign to send out tax notices to remind residents of their tax obligations. According to Europa Press:

[The Spanish tax authority] plans to quadruple the notices to taxpayers with cryptocurrency … going from 14,700 notices last year to about 66,000 in the campaign that started this Wednesday.

The campaign started on Wednesday, April 1, and will continue through June 30 regardless of the coronavirus pandemic situation, the publication conveyed. The campaign will also see the number of tax letters sent to residents with real estate rental income increase from 700,000 to 1.5 million this year and from 2.17 million to 2.32 million for those with accounts abroad.

Crypto Regulation and Taxation in Spain

While cryptocurrencies are not legal tender in Spain, the country currently has no specific regulatory framework for them, explained Global Legal Insights, a publication that specializes in providing information on legal, economic and policy developments.

Sales of cryptocurrencies are subject to capital gains tax at a variable rate of between 19% and 23%, the publication detailed, noting that the higher rate applies to gains in excess of 50,000 euros ($54,594). Meanwhile, the exchange of cryptocurrencies into euros and vice versa is exempt from value-added tax (VAT).

Spain is not alone in wanting to tax crypto owners; other countries that have done the same include the U.S., India, and Australia.

What do you think about Spain sending tax letters to 66,000 crypto owners? Let us know in the comments section below.

The post Spain’s Tax Authority Sending Notices to 66,000 Cryptocurrency Owners appeared first on Bitcoin News.