The Biden administration has recently proposed a historic 44.6% tax rate on capital gains, which would be the highest ever in the United States. This proposal is part of the President's budget for the fiscal year 2025, as reported by Forbes.

The 44.6% rate would only apply to those with taxable incomes of $1 million or more, and investment income of $400,000 or more. The main proposal is to raise the long-term capital gains and qualified dividends rates to 37% for these taxpayers. However, the 44.6% rate would only come into effect under a separate proposal from the administration's main capital gains rate increase.

This policy aims to create a level playing field for high ordinary income earners and investment income earners. However, it is important to note that the 44.6% rate is only applicable to those who meet the specific income thresholds.

As the administration pushes to increase taxes, businesses and individuals who may be affected may turn to digital assets to maintain economic freedom. The laws for reporting crypto taxes have not yet been fully implemented, and the rates are not as high as what Biden is proposing.

The U.S. Internal Revenue Service (IRS) recently released an early draft of a new tax form for reporting crypto transactions, known as 1099-DA. This form is designed to simplify tax liabilities linked to crypto transactions, recording taxable gains or losses and including specific token codes, wallet addresses, and other transaction information.

Many investors are likely to find the form easy to fill out, as tax experts have already provided guidance on how to do so appropriately. This proposal is a significant development in the world of taxation, and it remains to be seen how it will impact the economy and the crypto market.