Crypto tax amendment aims to reduce the US Budget deficit by around $11B over a decade

The United States’ budget for the 2023 fiscal year included around $11 billion in revenue in the next ten years from advancing rules around crypto-assets. On Monday, the White House released the FY2023 budget that modifies the crypto tax rules on digital assets, which reduces the deficit by $10.9 billion between 2023 to 2032. The government said that it will “modernize rules” by the inclusion of a rule for certain taxpayers to report their digital assets holdings in foreign accounts. Here is the list of key amendments:

• Modernize rules treating loans of securities as tax-free to include other asset classes and address income inclusion 
• Provide for information reporting by certain financial institutions and digital asset brokers for purposes of exchange of information
• Require reporting by certain taxpayers of foreign digital asset accounts 
• Amend the mark-to-market rules to include digital assets 
• Subtotal, modernize rules, including those for digital assets

It also suggested a “tax-free classification of securities loans to include other asset classes and address income inclusion.”

The Crypto tax rule aims to generate $4.9 billion in revenue in 2023

According to the Biden administration, updating crypto tax rules to encompass digital assets will generate $4.9 billion in revenue for the government in 2023. In addition, the budget allocated $52 million to strengthen the Department of Justice’s capabilities to handle cyber risks to the United States in order to prevent “the misuse of cryptocurrency.” The funds will be used to offer “more agents, enhanced response capabilities, and strengthened intelligence collection and analysis capabilities” to the government agency.

During the last administration, the national deficit increased every year. pic.twitter.com/FJDRY9A1Vx

— The White House (@WhiteHouse) March 28, 2022

President Biden stated that his administration was on schedule to cut the US debt by $1.3 trillion by 2022. According to the White House, one of the president’s suggestions to raise revenue for the government is to impose a 20% income tax rate on U.S. households earning more than $100 million, which is around 0.01%.

Notably, this Friday, lawmakers in India passed a crypto tax rule that would impose a 30% tax on digital assets including NFT transactions.