• The Biden Administration’s proposal to tax Bitcoin miners in the United States has been scrapped, a national policymaker confirmed on Sunday.
• The withdrawal is part of a series of tax-related concessions made by the administration in negotiations surrounding the nation’s fast-approaching debt ceiling.
• Ohio Rep. Warren Davidson shared the text for the newly proposed debt ceiling deal on Sunday; it would suspend the debt limit until January 1, 2025 and implement spending cuts, but no mention of the administration’s previously proposed Digital Asset Mining Energy (DAME) tax was included.
US Scraps Plans for Bitcoin Mining Excise Tax
The Biden Administration’s federal budget proposal to charge a 30% tax on all Bitcoin miners in the United States has been scrapped, a national policymaker confirmed on Sunday. This withdrawal is part of a series of tax-related concessions made by the administration in negotiations surrounding the nation’s fast-approaching debt ceiling.
New Debt Ceiling Deal Proposed
Ohio Rep. Warren Davidson shared the text for the newly proposed debt ceiling deal on Sunday – a culmination of negotiations between Democratic President Joe Biden and Republican House Speaker Kevin McCarthy. The bill would suspend the debt limit entirely until January 1, 2025, removing it as an issue going into 2024 Federal election. On top of that, it would also implement spending caps and reductions in IRS funding which would take effect immediately.
No More Mining Tax
In response to Davidson’s announcement about this new bill, Pierre Rochard – VP of Research at Bitcoin mining company Riot Platforms – noted that there was no mention of Biden’s previously proposed Digital Asset Mining Energy (DAME) tax which had aimed to charge miners 30% for consuming energy when mining bitcoin. Davidson then confirmed that this proposal was indeed gone from their list and that blocks on Democrat-proposed taxes were among Republicans‘ negotiating victories during these talks.
Biden Negotiates Concessions
This news about scrapping plans for Bitcoin mining excise taxes came after weeks of negotiation between Biden and McCarthy regarding how to address America’s high national deficit as they approach their deadline for raising their debt ceiling later this summer. After much back and forth between both sides over what taxes should be increased or decreased as well as where spending should be cut or increased, both parties have now reached an agreement with compromises made from both sides – one being that Republicans‘ won’t have to pay any type of crypto mining related taxes anymore under this bill if passed into law.
Thus, while cryptocurrency miners may now breathe a sigh of relief as they will not have to pay extra taxes due to their activities, they should still remain aware that regulations will likely continue changing in response to rising digital asset adoption rates across America and beyond moving forward into 2021 and beyond