- Energy tax for mining digital assets has been removed from consideration
- Previously, the CEA proposed a 30% levy on electricity costs.
On Sunday, May 28, US President Joe Biden and Speaker of the House of Representatives Kevin McCarthy concluded agreement on the national debt ceiling in the country. There is one important piece in the 99-page bill that talks about blocking some taxes on mining, including the Digital Asset Mining Excise Tax (DAME).
With the adoption of this tax, firms that mine cryptocurrencies will be taxed at a rate of 30%. According to the Biden administration, such a move is necessary to “reduce the environmental and social impacts that result from mining operations in the field of cryptocurrencies.”
The CEO of bitcoin mining advocacy group Satoshi Action Fund, Dennis Porter, asked if the administration’s DAME excise tax proposal had disappeared. US Congressman Warren Davidson responded: “Yes, one of the wins is blocking the proposed taxes”
The idea of introducing an energy tax was originally put forward in March this year. Interestingly, this also applies to Proof-of-Work and Proof-of-Stake (PoS) miners, despite the significant differences in energy consumption.
However, the proposal drew criticism from cryptocurrency advocates. Democratic presidential candidate Robert F. Kennedy, Jr. stated:
“BTC mining uses about the same thing as video games, and no one is calling for a ban. The environmental argument is a selective pretext to suppress anything that threatens the power structures of the elite.”
During the recent Bitcoin 2023 conference, Republican Senator Cynthia Lummis also voiced her displeasure with the proposal. She stated that the rise of the bitcoin mining industry is not only a matter of national security, but also a matter of energy security.