The Biden White House is preparing to unveil a comprehensive tax plan that will include significant increases in capital gains taxes on those earning over $1 million, but there is no evidence to suggest that cryptocurrency will be specifically targeted.

Bloomberg reported that as part of the White House’s next economic package, the Biden Administration will propose a 39.6% capital gains tax for those earning over $1 million. The current maximum capital gains tax rate is just over 20%. When combined with existing surtaxes on investment income, this would push the federal tax rate to nearly 43.4% — and in high tax states such as New York and California this total amount would be over 50%. 

Although gains from cryptocurrency would be included in any sort of calculation on capital gains tax, the White House has not specifically highlighted crypto as a new category for taxable commodities. Needless to say, rumors spread fast on Crypto Twitter that an 80% tax rate on crypto-specific gains was in the works.   

“I think the 80% discussion had no basis in reality,” Max Schatzow, an attorney with Stark & Stark that advises fund managers and RIAs. “I can’t recall any serious sources reporting that figure.”

Regardless of if a crypto-specific tax is in the works, the digital asset market seems spooked about the possibility of higher capital gains taxes. The price of bitcoin fell below the $50,000 market to $49,500, the lowest in nearly two months late Thursday, and is hovering just above the $50,000 point during the US Friday trading session. 

Bitcoin is down nearly 20% over the past week, according to CoinGecko. 

In a note in mid-March investor Ray Dalio argued that the United States is on a path to being “inhospitable to capitalism” because of a “new paradigm” of “shocking tax changes” put in place to pay for the fiscal response to Covid-19. 

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    Sam Reynolds is a Taipei-based reporter, covering digital assets and regulation throughout Asia. Before joining Blockworks he was an editor at Forkast News and an analyst with IDC.