As part of his presidential tenure and subsequent campaign for re-election, US President Joe Biden is committed to targeting the cryptocurrency industry and its traders.
President Biden in Congress.
Source: PBS.ORG
In yet another speech, Biden stated his determination to alter the existing tax system by eliminating ‘loopholes’ that “help wealthy crypto traders”. Aforementioned loopholes, however, don’t seem to be real.
As pointed out by countless Twitter users, the US IRS states that “virtual currency is treated as property and general tax principles applicable to property transactions apply to transactions using virtual currency.” Meaning, crypto users pay capital gains tax when selling their crypto.
Source: Twitter
“There is no evidence of “loopholes” to avoid this.”
By associating cryptocurrency benefits with “MAGA Republicans”, Biden effectively turns his supporters towards a misleading tabloid perception of crypto, one which regurgitates the FTXs, supposed fascism and terrorism funding, money-laundering and scams till foaming at the mouth. And why wouldn’t these tropes be perpetuated by the media? It’s not like financial fraud, rug-pulls, fascist and terrorist funding, money-laundering and scams existed prior to the creation of Bitcoin. So what is this all for and about?
The next US presidential election is scheduled for November 5, 2024, with Biden running against the likes of Florida governor Ron DeSantis, environmental lawyer Robert F. Kennedy Jr., philosopher Cornel West, former vice president Mike Pence, former US president Donald Trump, and many others. The easy talking points dividing the candidates are obviously the war in Ukraine, the economic crisis and financial assistance programs, gun control, minority discrimination, bodily-autonomy rights, and some sort of promised empyrean “truth” delivered to the people. And Biden, facing severe criticism for aiding Ukraine, isn’t wielding too many winning promises. After all, the direct implications of sanctioning Russian crude oil and petroleum products has contributed greatly to at least the surge in gas prices, which the average American feels severely and daily.
There can be no satisfying explanation to placate the masses, no history lessons can impart an understanding of the severity of the situation across the ocean. Besides, it is not the war aid that is impacting prices across America, but rather the combination of failing economic policies with a pinch of sanctions on top.
So why target crypto?
In his tweet, President Biden estimated the detrimental impact of crypto loopholes on the government’s tax revenue amount to the loss of $18 billion. According to POTUS, crypto traders are also directly responsible for putting food assistance at risk. Similar sentiment is echoed across social media about the US’ assisting Ukraine in its efforts to fend off the invading Russia. Both statements erroneously imply that said money, aid or crypto gain, is coming from the social benefits package, which is false.
And the truth is that Biden’s stance on crypto (and mysterious loopholes) is a non-negotiable prerequisite for accepting the debt deal in the US default crisis.
The debt crisis refers to the US government reaching its borrowing limit, aka the debt ceiling. The debt ceiling is the maximum amount of money that the federal government is allowed to borrow in order to pay its bills and meet its financial obligations. On June 2, 2023, Congress voted to raise the debt ceiling, so as to prevent default on US debt repayments, which would have severe consequences for the economy, both domestically and globally.
The reached deal involves raising the government’s borrowing limit and suspending the debt ceiling until 2025. This allows the government to continue borrowing money to pay its bills without the risk of default until after the next presidential election. The deal also includes provisions related to spending caps, defence spending, unspent COVID funds, welfare benefits, tax enforcement, and energy project permits, among other aspects. It is a result of negotiations and compromises between Republicans and Democrats, with each side claiming victories and making concessions on various issues.
In this context, the loopholes in question aren’t just the ability of traders to sell and repurchase cryptocurrency within short time frames without incurring higher tax rates, but also the very act of being able to have and use crypto. Further confusing is the fact that the US government still cannot provide a comprehensive definition of what crypto is and the appropriate regulations for it.
Blaming the elusive “wealthy” is an easily-digestible rhetoric among Biden’s supporters (whether true supporters or those who chose “the lesser of two evils”) but this shouldn’t permit delusion surrounding the benefits of decentralised finance and the opportunities it presents to minorities.
The upcoming election is an exercise in priorities, as most candidates hold extremely polarising opinions, be it scientific misinformation but with financial freedom, or social equality without. Arguably, accessible financial freedom paves way for liberty and equality significantly more than shallow political correctness and social grace.
