In a recent interview, he advocated for eliminating capital gains taxes on crypto transactions.

"They have them paying tax on crypto, and I don't think that's right," Trump said. "Bitcoin is money, and you have to pay capital gains tax if you use it to buy a coffee? I was talking with a friend. He said, 'It really shouldn't be taxed,' and I agree. Maybe we get rid of taxes on crypto and replace it with tariffs."

This proposal directly addresses a common frustration among crypto users: the complexity of capital gains taxes on routine purchases. For instance, when Bitcoin is used to buy coffee, users must pay tax on any increase in its value since purchase. Such requirements discourage people from using digital currencies for everyday transactions.

Meanwhile, Vice President Kamala Harris has proposed higher long-term capital gains taxes. Under her plan, the top rate would rise to 28% for individuals earning over $1 million annually. This contrasts with President Biden's proposed budget for 2025, which suggests increasing the tax to 39.6% for top earners.

However, should Trump win the presidency and Republicans control Congress, capital gains tax hikes would likely be ruled out, according to Erica York, senior economist at the Tax Foundation.

Trump's Crypto Tax Plan: U.S. Tokens Only

Trump's proposal aims to eliminate capital gains taxes on U.S.-made cryptocurrencies, promoting their use in daily transactions. He emphasized a preference for domestically produced tokens, excluding Chinese-made ones. Trump's strategic move contrasts with Italy's recent decision to impose a 42% tax on Bitcoin capital gains.

Higher earners face the net investment income tax (NIIT) of 3.8% on capital gains, interest, dividends, and rents when modified adjusted gross income surpasses set thresholds. For single filers, the limit is $200,000, while for married couples, it is $250,000, with no adjustments for inflation. Combining this with long-term capital gains taxes, high earners pay up to 23.8% on investments.