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Latest US Debt Ceiling Proposal Strikes Out Unpopular Crypto Tax Bill

source-logo  coinspeaker.com 29 May 2023 16:40, UTC

The recent US debt ceiling deal has struck out the previous crypto tax bill proposed by the Biden administration.

Congressman Warren Davidson has confirmed that the recent US debt ceiling deal blocks a potentially pivotal crypto tax bill proposed by the Biden administration. Davidson’s confirmation came as a response to a tweet by Bitcoin advocate and Riot Platforms research executive Pierre Rochard asking for clarity.

Following Sunday’s debt ceiling agreement between US President Joe Biden and House Speaker Kevin McCarthy, Rochard noted the absence of BTC mining in the proposed document. As a result, the VP of Research at Riot Platforms wanted to know whether Biden’s previously proposed Digital Asset Mining Energy (DAME) excise tax was off the table.

The crypto mining tax bill sought to impose a 30% tax on mining firms. This was to make up for the environmental and societal damage caused by their activities. However, according to Davidson, that proposed crypto tax bill was struck off in Sunday’s US debt ceiling agreement.

In response to Davidson’s affirmation, Rochard touched on the implications of the debt ceiling deal, pointing out:

“Well, as for the deal as a whole, I think divided government entails negotiation and compromise; elections have consequences. There’s a big one next year!”

The crypto enthusiast also thanked Davidson for providing clarity and described the Congressman as being receptive to Bitcoin matters.

Digital Asset Mining Energy (DAME) Tax

In March, the Biden administration proposed the Digital Asset Mining Energy tax, applicable to two digital asset mining classes. According to DAME, miners operating on Proof-of-Work (PoW) and Proof-of-Stake (PoS) protocols should be held accountable.

The proposed crypto mining tax bill called for all digital miners to disclose information – including electricity consumption levels – regardless of inherent consumption differences. The framework also called for disclosing the electricity source and its corresponding value. The Biden administration previously stressed that imposing financial constraints on miners is in America’s best interest.

However, critics of the so-called crypto mining reform question the perceived double standard of the tax bill. For instance, crypto advocate Robert F. Kennedy Jr previously argued that Bitcoin mining used roughly the same energy as video games, yet the latter does not face a ban. Earlier this month, Kennedy Jr also described crypto as a “major innovation engine” and called the mining tax a “bad idea”.

US Debt Ceiling Bill Faces Intense Lawmaker Scrutiny Despite Knocking Off Controversial Crypto Tax Proposal

Despite blocking the mining tax bill, the debt ceiling document still faces intense scrutiny from Congress. Furthermore, the bill, dubbed the “Fiscal Responsibility 5 Act of 2023,” has to secure approval from both legislative chamber members before it becomes law. Democratic and Republican lawmakers have to vote on the bill’s implementation before a June 5th deadline. The US president previously urged both party members to come together to pass the bill swiftly. As Biden said on Sunday, “The only way forward [is] a bipartisan agreement.”

Biden’s proposed debt ceiling bill seeks to suspend the US debt limit until 2025, averting a federal default. Furthermore, the “Fiscal Responsibility 5 Act of 2023”, decided upon late Sunday, proposes cutting back on government spending.

Observers believe some of the debt ceiling bill’s proposed dictates could prove unpopular with Congress and alienate lawmakers. However, Biden remains optimistic that the document would secure the necessary votes for implementation. House Speaker McCarthy also expressed optimism at the voting process outcome, saying, “People can look together to be able to pass this.”