President Joe Biden recently took to Twitter to share an infographic calling for the closure of tax loopholes that supposedly benefit wealthy cryptocurrency investors. The president estimated that the government could save approximately $18 billion by addressing these loopholes. However, he did not provide specific details about which loopholes he was referring to or how implementing reforms would lead to the stated cost savings.
The president’s tweet sparked a response from the crypto community, with some members expressing skepticism about the accuracy of the figures and the existence of the mentioned loopholes. Notable voices in the industry raised counterpoints and questioned the president’s claims.
@FatMan, a crypto researcher, disputed the tweet’s accuracy by highlighting that the crypto market had experienced a $1.4 trillion decrease in 2022, while U.S. corporate profits amounted to $11.8 trillion. In their tweet, @FatMan emphasized that the crypto market is considerably smaller and insinuated that the actual loopholes are elsewhere without specifying further. “We both know where the loopholes really are,” remarked @Fatman.
Your facts are off here. In 2022, total corporate profits in the US stood at 11.8 trillion USD. In the same time period, the total cryptocurrency market shrank by 1.4 trillion USD. The crypto market is both much smaller & fell heavily. We both know where the loopholes really are.
— FatMan (@FatManTerra) May 9, 2023
Billy Markus, co-founder of Dogecoin, also joined the conversation, seeking clarification on the specific loopholes mentioned by President Biden. Markus pointed out that he had contributed more money to the government than he had made from cryptocurrency investments, emphasizing that many American crypto users are not wealthy but instead turn to crypto out of necessity as they struggle to make ends meet.
what loopholes ser? i gave y’all more money than i made off this stuff, while taking all the risk
you also realize most american crypto users aren’t rich, but are using crypto cuz they don’t feel like they have enough to make ends meet – because of you guys?
— Shibetoshi Nakamoto (@BillyM2k) May 9, 2023
Entrepreneur and co-founder of Imprint Digital, Bobby Shell, responded to the tweet from President Biden with the claim that crypto investors typically lose 99% of their investment. Shell also suggested that Biden should investigate the various Ponzi schemes that have caused financial crashes in the past. Shell emphasized the importance of non-partisan support for Bitcoin as a means to ensure a prosperous future for America.
Crypto investors lose 99% of their money Joe.
Study all of the ponzis that crash!
This is why non-partisan support is for #Bitcoin only for an abundant America future.
— Bobby Shell⚡✞ (@iBobbyShell) May 9, 2023
Some Reddit users speculated that the tax loopholes referenced by the president might be related to the absence of the IRS wash sale rule, which does not currently apply to cryptocurrency. The wash sale rule prohibits selling securities at a loss and repurchasing them within 30 days.
While President Biden’s call to close tax loopholes in the cryptocurrency sector has ignited a discussion among industry stakeholders, the debate surrounding taxation and cryptocurrency will likely continue as regulators seek to strike a balance between addressing tax concerns and fostering innovation in the industry.
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