thecoinrise.com
The United States President Joe Biden has revived the proposal for a 30% tax on electricity used by cryptocurrency miners.
The initiative, outlined in the US Department of the Treasury’s document titled “General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals,” aims to bring the booming crypto mining industry under the tax umbrella.
As reported earlier by TheCoinRise, Fred Thiel, the CEO of Marathon Digital Holdings, says President Biden’s tax proposal on American Bitcoin miners will drive business abroad.
Joe Biden Gunning for 30% Crypto Mining Tax
The Joe Biden administration points out that current laws lack specificity when it comes to digital assets, focusing primarily on broker and cash transaction reporting.
To fill this void, the proposed excise tax targets any entity utilizing computing resources for digital asset mining, whether owned or leased. The tax would amount to 30% of the electricity costs associated with the mining process.
Reporting the Quantity and Nature of Electricity Used
If implemented, crypto mining companies would be required to meticulously report the quantity and nature of electricity used. Additionally, those leasing computational capacity must disclose the value of the electricity provided by the lessor, serving as the tax base.
The proposal by Joe Biden is slated to take effect for taxable years beginning after December 31, 2024, and will be introduced gradually over three phases: 10% in the first year, 20% in the second, and a full 30% in the third.
Industry Players Weigh in on the Proposal
Even companies harnessing renewable energy sources like solar or wind power would not be exempt from the tax.
Pierre Rochard, Vice President of Research at Bitcoin mining infrastructure firm Riot Platforms, suggests that the move may be a strategic attempt to suppress Bitcoin and pave the way for a central bank digital currency (CBDC).
Joe Biden Facing the Pro-Crypto Rival
Not everyone is on board with the proposed tax, however. US Senator Cynthia Lummis has voiced strong opposition, stating that while the inclusion of crypto in the budget reflects a bullish stance, a 30% tax could severely undermine the industry’s presence in the United States.
As reported earlier by TheCoinRise, multiple pro-crypto candidates are challenging Joe Biden for the presidency of the US, including former President Donald Trump, who has debuted two non-fungible token (NFT) collections. Following the surge in the price of Bitcoin (BTC), Trump may now be more open to endorsing the leading digital asset.