Biden Proposes Highest Capital Gains Tax Since 1900s, May Affect Bitcoin

President Biden proposes increasing the capital gains tax to 44.6%, the highest since its inception.
Biden Proposes Highest Capital Gains Tax Since 1900s, May Affect Bitcoin

Key Takeaways

  • Biden proposes a capital gains tax increase to 44.6% for high earners.
  • The new tax rules aim to treat Bitcoin similarly to stocks and securities.
  • Potential tax rates over 50% could significantly impact the market.

On April 24, 2024, President Biden proposed a significant increase in the capital gains tax rate to 44.6%.

This rate is detailed in the 2025 U.S. budget proposal.

Impact on high earners and Bitcoin

The increase targets taxpayers with incomes over $1 million, proposing a base rate of 37% with additional taxes on investment income over $400,000.

The plan also seeks to modify Bitcoin’s tax treatment by eliminating certain tax subsidies.

Potential effects on investors

The proposed rate marks a sharp increase from the current 20% cap on long-term capital gains.

If enacted, the combined federal-state rate could exceed 50% in many states.

This unprecedented hike could notably affect both stock market and Bitcoin investors, adding complexity without adjusting for inflation.

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