- The Biden administration has proposed imposing a 30% electricity tax on mining companies.
- If approved, the new rules would take effect on January 1, 2025.
- US Senator Cynthia Lummis criticized the budget item on taxing bitcoin miners.
The administration of US President John Biden initiated a 30% tax on electricity for mining companies. This was reported by Pierre Rochard, vice president of research at the firm Riot Platforms.
Biden administration is proposing a 30% tax on electricity used by #bitcoin miners, even if you are off-grid using your own solar and wind generation. All of the reasons they provide are pretextual, their real reason is that they want to suppress Bitcoin and launch a CBDC.
- Pierre Rochard (@BitcoinPierre) March 12, 2024
According to Rochard, with the help of taxes, the Biden administration wants to “suppress the spread of bitcoin in the United States and launch a central bank digital currency (CBDC).” At the same time, the expert called the possibility of taxing mining firms unlikely.
It is noteworthy, in January 2024, the American politician Donald Trump said that he would ban the creation of CBDC in case of his election as President of the United States. On February 26, 2024, a bill titled “Countering the Oversight of Central Bank Digital Currency” was introduced in the US Senate. It was prepared by a group of Republicans who oppose the introduction of such a means of payment.
The document “General Explanation of Revenue Proposals” states that the current laws do not address digital assets, except for reports on brokerage and money transactions. As such, the administration wants to impose a tax on mining.
“Any firm that uses computing resources owned or leased from others to mine digital assets would be subject to an excise tax. It is equal to 30% of the cost of electricity used in the mining of digital assets,” the document said.
Thus, mining companies will have to report the type and amounts of electricity they use. If the budget is approved, the document will come into force after December 31, 2024.
The tax is planned to be introduced in three stages: 10% in the first year, 20% in the second and 30% in the third. It is reported that the taxation will affect even mining firms that generate their own electricity.
U.S. Senator Cynthia Lummis criticized Biden’s initiative. The mention of cryptocurrencies in the country’s budget is a good sign, but a 30% tax could destroy the industry, she said.
The White House 2025 budget is incredibly bullish on crypto assets, some might even say they believe it’s going to the moon.🚀
But a proposed 30% punitive tax on digital asset mining would destroy any foothold the industry has in America.
- Senator Cynthia Lummis (@SenLummis) March 11, 2024
This isn’t the first time Joe Biden’s administration is going to impose a 30% tax on electricity. It has already attempted to tax mining firms in March 2023.
Recall that in February, the Texas Blockchain Council (TBC) said that the US authorities are trying to “limit or eliminate” the mining industry. The reason for these statements was the collection of data on the amount of electricity consumed by firms.
