Reports suggest that the Biden administration could double the capital gains tax from 20% to 39.6% for large investors. The news caused stock markets and crypto markets to lose value. Though the tax will not affect most crypto investors, it could be detrimental to the crypto industry in a broader sense. The news has also attracted discussion on social media, as users criticize the plan or argue that fears are overblown.
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Reports suggest that the Biden administration is preparing to propose one of the largest capital gains taxes in U.S. history, one that will nearly double the tax rate for wealthy investors.
Taxes Target Wealthy Investors
News of the possible tax increase was initially disclosed to Bloomberg by White House staffers on Apr. 22.
If the proposal is enacted, it will raise the capital gains tax from 20% to 39.6% for investors that earn more than $1 million. This would raise $370 billion for government spending.
News of the possible increase has impacted the stock market and the crypto market alike. According to Reuters, Bitcoin fell below $48,000 within hours of the news, a loss of approximately 4%. Ethereum saw losses of about 10%. Meanwhile, the S&P 500, the Dow Jones, and Nasdaq all saw losses of approximately 0.9%.
The news has also seen large amounts of discussion on social media communities related to cryptocurrency. The topic became a top-ranking thread on Reddit’s /r/cryptocurrency subreddit, gaining more than 1,250 comments. Users variously expressed concerns over the plan or suggested that fears are overblown.
Will the Proposal Pass?