- Biden’s 2025 tax proposals trigger an angry backlash.
- Crypto investors accuse Biden of squeezing the public.
- Despite widespread pushback, many individuals will not be affected.
With tightening budgets and mounting financial pressures, the mere mention of a tax increase will surely trigger concerns. As individuals grapple with the realities of soaring costs and stagnant wages, any perceived threat to the current standard of living is met with understandable trepidation, fueling fears of the ever-widening gap between the haves and the have-nots.
The recent release of the Biden administration’s 2025 tax proposal has made headlines, stoking worries about the government’s aggressive stance. Amid a flurry of sensational headlines and dire predictions, many are questioning Biden’s end game, particularly with the “war on crypto” still fresh in mind.
Angry Pushback
Among the sensational headlines prompting outrage are a proposed 44.6% hike in the capital gains tax rate and a 25% tax on unrealized gains, triggering concerns that the Biden administration is coming for crypto investors and entrepreneurs alike.
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David Sacks, the co-founder of SaaSGrid, expressed disbelief at the concept of being forced to sell an asset to pay unrealized gains tax, only to then get clobbered twice more with federal and state capital gains taxes on the forced asset sale.
Crypto YouTuber Christopher Green linked the tax hikes to “unconstitutional” wars while calling the current administration treasonous. In a fiery tweet, Green inferred that the tax proposal was part of a coup to squeeze an already downtrodden American public further.
Alluding to Ronald Reagan’s landslide victory in the 1980 presidential election, entrepreneur Grant Cardone reminded his followers that the last time a similar tax hike was proposed, “the entire country went red.”
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While Biden’s tax proposals have no shortage of pushback, with critics painting them as an existential threat to American prosperity, a deeper examination reveals that the majority of people will be unaffected.
Biden’s Crypto Tax is For the Ultra-Wealthy
Although public backlash to Biden’s proposal has been fierce, tax experts are downplaying the impact on ordinary individuals. Crypto accountant “Squeeze” labeled the episode as “another headline catfish,” clarifying that the uproar is overblown.
Squeeze explained that the 44.6% capital gains figure is simply a combination of two separate proposals. First is raising the top ordinary tax rate to 39.6% for the highest earners, just 2.6% above the current 37% rate. Second is increasing the Net Investment Income Tax (NIIT) by 1.2% to 5%. According to Squeeze, average income earners will not be affected, as the proposals explicitly target those making over $1 million annually.
Additionally, page 83 of the tax proposal clarified that the controversial 25% unrealized gains tax applies solely to taxpayers with a net worth exceeding $100 million. This key detail excludes the vast majority of individuals but has largely been overlooked during the widespread outrage.
On the Flipside
- The Biden administration‘s 2025 tax proposal was published on March 11, six weeks ago.
- The tax proposal includes increased disclosure requirements for crypto investors, including transaction IDs on tax returns.
- Gene Marks, CPA, stated that the wealthy can legally evade taxes, including the 25% unrealized gains tax, making plans to increase taxes on the rich futile.
Why This Matters
While the stated targets of the 2025 tax proposals are high net-worth individuals, the ripple effects of such sweeping proposals may trickle down to the middle class. This episode has raised questions about the role of government in wealth distribution, particularly as average individuals may already be feeling the squeeze.
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