Good news for cryptocurrency miners in the United States: the proposed tax on their electricity consumption has been removed following negotiations between President Biden and Speaker of the House McCarthy. The plan now awaits House and Senate approval.
Tax deleted crypto miners
In a positive twist for cryptocurrency miners in the United States, the proposed tax on their energy consumption has been removed, Republican Congressman Warren Davidson has reported. After lengthy negotiations, an agreement has been reached between President Joe Biden and Speaker of the House of Representatives Kevin McCarthy to raise the country’s debt ceiling until January 2025, meaning it will take place after the next presidential election.
The debt ceiling is the maximum amount of debt the government is allowed to incur. By raising the debt ceiling, the government can borrow more money to meet its financial obligations and avoid a possible default.
Congressman Davidson (Republican from Ohio) confirmed via Twitter the development regarding the proposed cryptocurrency tax. He declared: “Yes, one of the victories is to block the proposed taxes.” This was in response to Pierre Rochard, vice president of research at Riot Platform, who noted that the new bill to increase the debt cap did not contain any mention of bitcoin mining.
Resistance to the White House crypto-mining tax plan
During the first week of May, the White House introduced a tax proposal aimed specifically at taxing the electricity consumption of cryptocurrency miners. This proposal, called the Digital Assets Mining Energy (DAME) Excise Act, provided for a gradual increase in the tax from 10% in 2024 to 30% in 2026.
The White House highlighted the significant amount of energy consumed by miners and its negative impact on the environment. Additionally, it has been estimated that the DAME Act will generate approximately $3.5 billion in revenue over a 10-year period.
The reaction from the crypto mining community has been overwhelmingly negative, with many seeing the move as a direct attempt to limit and weaken the influence of the crypto community.
In the meantime, New York-based company Bit Digital has announced that it will take proactive steps to evade the proposed tax on crypto mining by expanding to Iceland.
It is important to note that neither the White House nor the US Treasury Department has yet officially confirmed that the mining tax is definitely off the table. Blockworks has reached out for further information.
For now, the White House plan to tax crypto mining is on hold, while the approval of the debt ceiling has yet to be held by both the House and the Senate to become law.
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