Biden Revives 30% Cryptocurrency Mining Tax in New Budget Proposal
US Senator Cynthia Lummis said that while this shows that the government is bullish on cryptocurrencies, a 30% tax would destroy the industry's foothold in the country.
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US President Joe Biden has revived the idea of imposing a 30% tax on electricity used by cryptocurrency miners in his 2025 budget proposal.
In a US Treasury Department document titled “General Interpretations of the Administration’s FY 2025 Revenue Proposals,” the administration highlighted that current laws do not address digital assets apart from broker reporting and cash transactions. For this reason, the administration wants to impose an excise tax — taxes on goods like fuel — on digital asset mining, with the Treasury Department writing:
“Any company that uses computing resources, whether owned by the company or rented from others, to mine digital assets will be subject to an excise tax equal to 30% of the electricity costs used to mine digital assets.”
If implemented, cryptocurrency mining companies would have to report the amount and type of electricity they use. In addition, companies must report the value of electricity used if they purchase it from abroad. At the same time, miners who rent computational capacity will be tasked with reporting the value of their electricity to the company that rented the capacity to them, which will then serve as their tax base.
According to the administration, this proposal will be effective for taxable years after December 31, 2024, and the government will apply the tax in three stages: 10% in the first year, 20% in the second year, and 30% in the third year.
The tax will also apply to cryptocurrency mining companies that generate their own electricity. Businesses that produce or source energy “off the grid” will also need to pay a 30% tax on the estimated costs of their electricity bills.
Pierre Rochard, vice president of research at Bitcoin mining infrastructure company Riot Platforms, highlighted that even those using solar or wind power would be affected. Roshard believes this is a ploy to suppress Bitcoin
BTC
$72,162
And the launch of a central bank digital currency (CBDC).
More on Cointelegraph Arabic: Bitcoin miner revenues record second-best day in history
At the same time, US Senator Cynthia Lummis expressed her opposition to the tax proposal on the X platform. According to Loomis, while the inclusion of cryptocurrencies in the budget shows that the administration may be bullish on cryptocurrencies, a 30% tax would destroy the industry’s foothold in the United States.
This is not the first time the Biden administration has tried to impose a 30% tax on electricity used by cryptocurrency miners. On March 9, 2023, Biden made the same attempt to tax miners in his 2024 budget proposal.
