Biden’s 44.6% capital tax proposal could be ‘no burger’
US President Joe Biden's proposal to increase the capital gains tax rate to 44.6% for certain individuals – the highest rate in US history – may be a “no burger” for the average crypto investor.
Matthew Walrath, founder of Crypto Tax Made Easy, told Cointelegraph that Biden's latest tax promises likely won't affect most people in crypto even if signed into law.
“For 99.9% of people, it's a big, no-greasy burger because it's basically just a prop.”
The proposed tax rate – as well as an additional proposal to levy a 25% tax on unrealized gains – has received a lot of attention on social media, despite the information being released more than a month ago.
The now widely cited 44.6% figure was presented in a Treasury briefing paper released on March 11, which said the figure would only apply if two separate proposals were made – one aimed at increasing the ordinary tax rate and the other at the top tax rate. Investment income tax rate – approved.
“The proposal says they want to raise the long-term capital gains tax rate to 44.6% for people making more than $1 million a year,” Walrath said.
“Obviously high earners – if this budget proposal goes through – could face a much higher long-term capital gains tax rate. But in most cases, it's unlikely to affect the average crypto user.”
Echoing Walrath's stance, fake crypto accountant SqueezeTaxes said the backlash over the proposal was another “headline catfish” before breaking down what the proposed policies would mean for American citizens.
SqueezeTaxes explained that the proposals focused on raising the top federal tax bracket to 39.6 percent and increasing the net investment income tax (NIIT) to 5 percent. Combined, the figure reached 44.6%.
“The average income earner will not be affected by this. Biden's tax proposal targets high-income earners, at least $400,000 or more at one end, and $1 million or more at the other end,” SqueezeTaxes told Cointelegraph.
According to data from crypto payment firm TripleA, the average annual income of a crypto investor worldwide is around $25,000. This figure, however, includes income data from countries with lower average incomes than the United States.
Is Biden coming for unrealized benefits?
Notably, Biden's federal budget proposal included a 25% tax on untaxed gains for ultra-high-net-worth individuals.
In an April 25 post for X, Bitcoin analyst Jason Williams called the 25% tax proposal “insane” and said it could “single-handedly crush the economy.”
Related: IRS Releases 2025 Digital Asset Reporting Draft for US Taxpayers
However, Biden's proposed 25% tax targeting unrealized gains would only apply to taxpayers with a net worth of more than $100 million, according to a report by tax consulting firm Grant Thornton Tax Analysts.
“The undisclosed capital gains tax rate is the same. It's for extremely high-net-worth individuals. If it were passed, it wouldn't affect anyone on Crypto Twitter,” Walrath joked.
Ultimately, Walrath said Biden's tax proposals could be seen as political “posting” designed to curry favor with a lower-income voter base.
“It's more of a political play. The Democratic Party has made enemies among the wealthy, and this is one of the ways they play to lower incomes and lower education levels.
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