US Debt Ceiling Deal Bans 30% Bitcoin Mining Tax: Congressman

As details of the agreement reached between President Joe Biden and House Speaker Kevin McCarthy on the US debt ceiling were announced Sunday, a notable part of the deal appeared to be the withholding of some taxes proposed by the Biden administration, including for Digital Asset Mining Energy (DAME). ) production tax.

If passed, it would impose a 30% tax on cryptocurrency mining companies — a move the Biden administration has argued is necessary to limit the environmental and societal damage caused by cryptocurrency mining operations.

Dennis Porter, CEO of bitcoin mining advocacy group Satoshi Action Fund, asked if the administration’s “DAME tax proposal is out?” Given that bitcoin mining is not mentioned in the Invoice text, dubbing it “Fiscal Responsibility Act 5 of 2023.” US Congressman Warren Davidson (R-OH-08) responded in a tweet That “yes, one of the victories is the prevention of proposed taxes.”

The debt ceiling agreement, which continues to face scrutiny and thorough debate in Congress, comes in the form of a sweeping 99-page bill aimed at suspending the state’s debt limit through 2025, thus preventing a federal default, while simultaneously imposing limits on government spending. .

The Satoshi Action Fund did not immediately respond Decode Comment request.

What is the digital asset mining power tax?

The idea of ​​implementing an energy tax was initially proposed in March this year. Notably, the Digital Asset Mining Power (DAME) tax will be applicable to both digital asset miners operating on Proof-of-Work (PoW) networks such as bitcoin and Proof of Stake (PoS) networks such as Ethereumregardless of the fundamental differences in their energy consumption levels.

Under the proposed tax framework, digital asset miners would be required 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 extends to off-grid power generation, including the use of waste natural gas.

In a recent White House report, the Biden administration reiterated its position that imposing financial restrictions on miners is in the interest of American communities and the environment.

However, the proposal has faced criticism from crypto advocates.

Kennedy Jr. Democratic presidential candidate Robert F. Kennedy Jr said on Twitter earlier this month. “The environmental argument is a selective excuse to suppress anything that threatens elitist power structures.”

Republican Senator Cynthia Loomis also criticized the proposal during the recent Bitcoin 2023 conference, saying that the burgeoning bitcoin mining industry is not only a matter of national security, but also an issue of energy security.

While urging bitcoin enthusiasts to get involved in groups that advocate for the world’s largest cryptocurrency as part of the US economy, Senator Loomis also expressed his conviction that the proposed energy tax “is not going to happen.”