US Scraps Plans for Bitcoin Mining Excise Tax, Congressman Confirms
The Biden Administration’s federal budget proposal to charge a 30% tax on all Bitcoin miners in the United States has been scrapped, a national policymaker confirmed on Sunday.
The withdrawal is part of a series of tax-related concessions made by the administration in negotiations surrounding the nation’s fast-approaching debt ceiling.
No More Mining Tax
Ohio Rep. Warren Davidson shared the text for the newly proposed debt ceiling deal on Sunday – a culmination of negotiations between Democratic President Joe Biden and Republican House Speaker Kevin McCarthy.
The bill would suspend the debt limit entirely until January 1, 2025, removing it as an issue going into the 2024 Federal election. On the flip side, it would implement a number of spending cuts including caps on non-defense spending and reductions in IRS funding.
In response to Davidson, Pierre Rochard – VP of Research at Bitcoin mining company Riot Platforms – noted that the bill was absent any mention of the administration’s previously proposed Digital Asset Mining Energy (DAME) tax. Davidson confirmed that the proposal was gone, and that blocks on Democrat-proposed taxes were among Republicans’ negotiating victories.
The proposed tax would have made proof of work cryptocurrency miners pay a 30% tax on all energy spent during the mining process – effectively raising the cost of running a mining business in the United States.
The administration justified the tax in guidance to Congress earlier this month as a way to make miners “pay for the full cost they impose on others” through “higher energy prices” and “greenhouse gas emissions.”
Critics of the Excise Tax
Critics, however, claimed that the energy tax was arbitrarily targeting a specific industry, and would drive mining out of the US – which is currently the most popular mining hub worldwide.
Among them was Senator Cynthia Lummis, who told spectators at Bitcoin Miami 2023 that the burdensome tax “isn’t going to happen.”
“It’s absolutely important that the development of this technology, as well as Bitcoin mining itself, to occur in the United States,” she said at the time.
Many Bitcoin proponents contest the idea that mining is much of a harm to the environment in the first place. In September, MicroStrategy Executive Chairman Michael Saylor published a blog post arguing that miners’ carbon emissions would “hardly be noticed if it were not for the competitive guerrilla marketing activities of other crypto promoters & lobbyists.”
Ripple co-founder Chris Larson funded a $5 million environmental campaign last year to encourage Bitcoiners to move their protocol to a less energy-intensive consensus mechanism like proof of stake. Organizations like the Environmental Working Group and Greenpeace have taken part.
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Filed under: Bitcoin - @ May 29, 2023 7:21 pm