U.S. Congress revokes 30% Crypto Mining Tax in Debt Ceiling Deal

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Key takeaways:

  • The US government has decided against imposing a tax on bitcoin miners for the electricity they use.
  • Rep. Davidson (R-Ohio) tweeted a confirmation of the new information regarding the planned cryptocurrency tax.

Bitcoin miners can have a sigh of relief as the White House’s proposal to enforce substantial taxes on the industry seems to have fizzled out after President Biden and prominent Republicans reached a broader agreement to avert a potential U.S. debt default.

The recently announced agreement solves the pressing problem of the debt ceiling, which restricts the government’s ability to borrow money to meet its financial obligations. President Joe Biden and House Speaker Kevin McCarthy engaged in lengthy negotiations that resulted in the presentation of a preliminary draught of the legislation.

The planned 30% levy on energy bills for cryptocurrency miners has received a lot of backlash from industry participants and American lawmakers. Because it was seen as a success for the larger crypto business, the news of the omission was widely applauded on Twitter.

Pierre Rochard, Vice President of Research at Bitcoin mining firm Riot Platforms, highlighted that the crypto mining tax bill was not mentioned in the latest bill. In response, Rep. Davidson (R-Ohio) confirmed via Twitter that one of the victories achieved was blocking proposed taxes. 

The proposed legislation, if passed, would suspend the debt ceiling for two years, enabling the U.S. government to continue borrowing funds and fulfill its financial responsibilities. 

The debt ceiling represents the maximum amount of debt the government is authorized to issue, and increasing it allows for borrowing more money to prevent a potential default.

Before the issue of debt default arose, numerous individuals within the cryptocurrency space had already criticized the White House and proponents of the mining tax. Notably, former Kraken growth lead Dan Held commended the debt ceiling bill. 

The Biden administration stated that the proposed tax legislation aimed to target cryptocurrency miners due to the perceived negative environmental impact of their activities. According to the White House, even when utilizing clean energy, miners’ electricity consumption reduces the availability of clean power for other purposes, leading to increased prices and a greater reliance on less environmentally friendly energy sources.

Furthermore, the administration argued that cryptocurrency mining does not provide the same societal benefits as other energy-intensive industries. In response to concerns about the potential relocation of digital asset operations overseas, the White House pointed out that other major economies, like China, have also imposed restrictions on the industry.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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