President Joe Biden has expressed his opposition to a proposal that could result in low taxes for crypto investors, as reported by The Hill on May 21. Following a G7 summit in Hiroshima, Japan, Biden said that he would not agree to a deal that protects wealth tax cheats and crypto traders while putting food assistance at risk for nearly 1 million Americans. These comments relate to two competing government spending cut proposals.
Biden Criticizes Republicans for Their Proposal
The Biden administration wants to eliminate cryptocurrency tax loopholes to save $18 billion. However, Republicans prefer to make cuts to food safety inspections to save $15 billion. Biden said that the Republican proposals are “quite frankly, unacceptable” and that party members should move away from their “extreme positions.” He added that Republicans should “accept that there is no bipartisan deal” that can be made on the partisan terms they have suggested.
Biden Warns of Risk of Defaulting on Debt
Biden suggested that failure to reach an agreement could increase the risk that the United States government defaults on its debt, something that the U.S. Treasury has warned could occur by June 1 if the government does not raise its debt ceiling. He said that all four major congressional leaders agree that the U.S. must not default on its debt.
Details of Negotiations Remain Private
It is still unclear how potential savings from either plan have been calculated, and it appears that negotiations are largely private. The Washington Post reported on May 15 that White House officials have negotiated with Republican party members by phone in recent weeks. The paper reported that approximately one dozen plans have been considered and rejected during those calls. The Hill reported today that Biden will continue discussions with Kevin McCarthy (R-Calif.) as he returns to the U.S. from today’s G7 event.
In summary, President Biden opposes a proposal that could result in low taxes for crypto investors and wants to eliminate cryptocurrency tax loopholes to save $18 billion. Republicans prefer to make cuts to food safety inspections to save $15 billion. Biden warned of the risk of defaulting on its debt if an agreement is not reached, and negotiations remain largely private.