U.S. Cancels Bitcoin Mining Excise Tax Plan, Congressman Confirms

Bitcoin miners in the U.S. will not be taxed for the energy they consume following the U.S. debt ceiling talks.

The Biden administration's federal budget proposal for a 30% tax on all U.S. bitcoin miners has been scrapped, a national policymaker confirmed Sunday.

The withdrawal was part of a series of tax-related concessions made by the government in negotiations over the country's fast-approaching debt ceiling.

No Mining Tax

Ohio Rep. Warren Davidson shared the text of the newly proposed debt ceiling deal on Sunday, in talks between Democratic President Joe Biden and Republican House Speaker Kevin McCarthy orgasm.

The bill would completely suspend the debt ceiling until January 1, 2025, removing it as an issue in the 2024 federal election. On the other hand, it will implement several spending cuts, including limiting non-defense spending and cutting funding for the IRS.

In response to Davidson, Pierre Rochard, vice president of research at bitcoin mining firm Riot Platforms, noted that the bill makes no mention of the government's previously proposed Digital Asset Mining Energy (DAME) tax. Davidson confirmed that the proposal had been dropped and that one of the Republicans' negotiating wins was blocking the Democrats' proposed tax.

The proposed tax would see proof-of-work cryptocurrency miners pay a 30 percent tax on all energy consumed in the mining process, effectively raising the cost of running a mining operation in the United States.

Earlier this month, the U.S. government defended the tax in guidance to Congress, arguing that it would make miners “pay for the full costs they impose on others” through “higher energy prices” and “greenhouse gas emissions.” " a way.

Critics of GST

Critics, however, claim the energy tax arbitrarily targets specific industries and will drive mining out of the United States, currently the world's most popular mining hub.

Among them was Sen. Cynthia Lummis (R-D.), who told the audience at the Miami Bitcoin Conference 2023 that onerous taxation "is not going to happen."

She said at the time, “It’s absolutely important that the development of this technology, and bitcoin mining itself, happen in the United States.”

Many Bitcoin proponents question the notion that mining is much harmful to the environment in the first place. In September, MicroStrategy executive chairman Michael Saylor published a blog post arguing that miners’ carbon emissions “would go almost unnoticed were it not for the competing guerrilla marketing campaigns of other cryptocurrency promoters and 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, Environmental Working Group and Greenpeace Organizations such as organizations have been involved.