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According to the new Biden government proposal, in the case of a tightening regulatory environment for digital coins, it is necessary to report cryptocurrency transfers exceeding $10,000 to the U.S. tax authorities.
The U.S. proposal, announced the day after China stated that it would impose a regulatory crackdown on digital currencies, is part of a broad series of proposals aimed at curbing tax evasion.
After the United States announced its proposal, the price of Bitcoin, the most actively traded cryptocurrency, fell by 5%.
It followed Chaotic hours When the People’s Bank of China warned financial institutions to accept cryptocurrency as payment or provide related services and products on Wednesday, Bitcoin transactions changed. After making the above comments, the price of Bitcoin dropped by 30% before finally recovering.
The U.S. Treasury Department stated that cryptocurrency constitutes a “major investigation issue” by promoting a wide range of illegal activities, including tax evasion, and responded to this week’s European Central Bank’s comment, which stated that cryptocurrency’s “may be used for illegal purposes” order People worry.
The US proposal is part of the US Treasury Department’s report, which shows how Biden’s White House plans to strengthen the IRS to bridge the so-called “tax gap”. The report is the latest in a series of White House proposals that will cause the wealthiest Americans to pay more taxes.
The Biden administration intends to narrow the tax gap (the difference between the tax owed to the US government and the tax actually paid) by investing nearly $80 billion in the IRS and expanding the capacity of the tax department to identify the wealthy who avoid tax evasion.
These proposals include new disclosure requirements for financial institutions. In addition to existing reports, information about the total amount in and out of bank accounts needs to be shared with the IRS.
According to the U.S. Department of the Treasury, the overall “tax gap” last year was US$600 billion. If it is not resolved, it is expected to rise to about US$7 billion in the next ten years. The Ministry of Finance stated that it should pay about 99% of payroll taxes each year, but it is estimated that compliance with “hidden” income sources (such as sole proprietorship or rental income) related to “high-income earners” is far reduced.
Treasury Department estimates show that the proposed IRS reform will add $700 billion in additional tax revenue over the next 10 years and $1.6 billion in tax revenue over the next ten years.
The Treasury Department stated that according to the President’s proposal, the audit rate will not increase for people with an annual income of less than US$400,000.
These proposals are part of Biden $1.8tn American Family PlanThis is an ambitious legislative plan. If approved by Congress and signed into law, it will bring a significant expansion of federal funding for childcare, higher education, and family and medical leave in the United States.
The White House is proposing to pay part of the cost of the plan, adding approximately $150 million in taxes to wealthy Americans, including almost doubling the capital gains tax on those earning more than $1 million.This suggested Tax increase triggered Recoil Among critics on Wall Street and American companies.
For lawmakers in Washington, the plan to combat tax evasion may be more politically palatable, especially Republicans, who warned of any reversal of Donald Trump’s 2017 tax cuts.
The “American Family Plan” formulated by the White House last month is the third component of Biden’s far-reaching economic agenda, following the US$190 million fiscal stimulus bill and US$230 million signed into law in March. Infrastructure recommendations There is a debate on Capitol Hill.
Republicans largely rejected the president’s proposal, accusing Democrats of wasting expenditures, which may intensify inflation. Republican senators have put forward nearly $600 billion in opposition to the president’s infrastructure package, although Republicans have suggested in recent days that they accept a package that costs close to $800 to 900 billion.
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