US Debt Ceiling Deal Blocks 30% Bitcoin Mining Tax: Congressman
As the details of the agreement reached between President Joe Biden and House Speaker Kevin McCarthy on the U.S. debt ceiling were made public Sunday, one notable part of the deal appears to have blocked some taxes proposed by the Biden administration, including the Digital Asset Mining Energy (DAME) excise tax.
If passed, it would impose a 30% tax on cryptocurrency mining firms—a move that the Biden administration argued was required to limit the environmental and societal damage caused by crypto mining operations.
AD
AD
Dennis Porter, CEO of Bitcoin mining advocacy group the Satoshi Action Fund, questioned whether "the Administration's DAME excise tax proposal is gone?" given that Bitcoin mining wasn't mentioned in the text of the bill, dubbed the “Fiscal Responsibility 5 Act of 2023.” U.S. Congressman Warren Davidson (R-OH-08) responded in a tweet that, "Yes, one of the victories is blocking proposed taxes."
The debt ceiling agreement, which still faces thorough scrutiny and debates in Congress, comes in the form of a comprehensive 99-page bill aimed at suspending the nation's debt limit until 2025, thereby preventing a federal default, while simultaneously imposing restrictions on government spending.
The Satoshi Action Fund didn’t immediately reply to Decrypt’s request for comment.
Yes, one of the victories is blocking proposed taxes. — Warren Davidson 🇺🇸 (@WarrenDavidson) May 29, 2023
What is the Digital Asset Mining Energy tax?
The idea of implementing an energy tax was initially suggested in March of this year. Notably, the proposed Digital Asset Mining Energy (DAME) tax would be applicable to both digital asset miners operating on Proof-of-Work (PoW) networks like Bitcoin and Proof-of-Stake (PoS) networks like Ethereum, regardless of the substantial differences in their energy consumption levels.
Under the proposed tax framework, digital asset miners would be obligated to disclose information such as the amount of electricity they consume, the source of that electricity (whether it is derived from renewable sources or not), and its corresponding value. This requirement would extend to off-grid power generation, including the utilization of otherwise wasted natural gas.
In a recent report released by the White House, the Biden administration reiterated its position that imposing financial constraints on miners is in the best interest of American communities and the environment.
The proposal, however, faced criticism from crypto advocates.
AD
AD
“Bitcoin mining uses about the same as video games, and no one is calling for a ban on those,” Democratic presidential candidate Robert F. Kennedy Jr. said on Twitter earlier this month. “The environmental argument is a selective pretext to suppress anything that threatens elite power structures.”
Yes, energy use is a concern (though somewhat overstated), but bitcoin mining uses about the same as video games and no one is calling for a ban on those. The environmental argument is a selective pretext to suppress anything that threatens elite power structures. Bitcoin, for… — Robert F. Kennedy Jr (@RobertKennedyJr) May 3, 2023
Republican Senator Cynthia Lummis also blasted the proposal during the recent Bitcoin 2023 conference, saying that a thriving Bitcoin mining industry is not only a matter of national security, but also an issue of energy security.
While urging Bitcoin enthusiasts to participate in groups that advocate for the world’s largest cryptocurrency as part of the U.S. economy, Senator Lummis also expressed conviction that the proposed energy tax “isn't going to happen."
Source: Decrypt
