Joe Biden Recommends 30% Crypto Mining Tax
12 Mar, 2024 ● Crypto people
President Joe Biden has reintroduced the concept of imposing a 30% tax on electricity consumed by crypto miners in his budget proposal for 2025.
Outlined in a document from the U.S. Department of the Treasury titled "General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals," the administration noted the absence of specific regulations regarding digital assets apart from broker and cash transaction reporting.
Consequently, they propose imposing an excise tax, typically applied to goods like fuel, on digital asset mining. The Treasury outlined:
“Any firm using computing resources, whether owned by the firm or leased from others, to mine digital assets would be subject to an excise tax equal to 30 percent of the costs of electricity used in digital asset mining.”
If enacted, crypto mining companies would be required to report both the quantity and source of electricity used. Additionally, firms purchasing electricity externally would need to disclose its value.
Similarly, miners leasing computational capacity would be obliged to report the value of the electricity from the lessor. This value would serve as the taxable base.
The administration aims to implement this proposal for taxable years following Dec. 31, 2024. The tax would be phased in over three years: 10% in the first year, 20% in the second, and 30% in the third.
The tax would extend to crypto mining entities generating their own electricity. Those generating or acquiring power "off-grid" would also face a 30% tax on estimated electricity costs.
Critics, such as Pierre Rochard from Bitcoin mining infrastructure firm Riot Platforms, argue that even miners utilizing solar or wind energy would be affected.
Rochard sees this as an attempt to stifle Bitcoin and promote a central bank digital currency (CBDC).
U.S. Senator Cynthia Lummis expressed opposition to the tax proposal, suggesting that while its inclusion in the budget signals potential bullishness on crypto, a 30% tax could harm the industry's position in the United States.
This isn't the first time the Biden administration has proposed a 30% tax on electricity used by crypto miners. A similar attempt was made in the budget proposal for 2024, announced on March 9, 2023.
Sources:
https://cointelegraph.com/news/crypto-mining-tax-united-states-budget
https://home.treasury.gov/system/files/131/General-Explanations-FY2025.pdf
https://twitter.com/BitcoinPierre/status/1767371855512432900
