Cryptocurrency Miners Fault U.S. Presidency’s 30% Tax Policy, Laments Consequences
A proposed tax plan by the Biden administration has rocked the cryptocurrency mining business. The Digital Asset Mining Energy tax (DAME) plan has come under heavy criticism from industry participants who contend that it would encourage mining operations abroad and impede innovation.
The 30% excise tax on electricity prices that digital asset miners would be subject to under the proposed tax scheme would greatly increase operational expenditures for mining companies. Industry insiders caution that the planned tax would disastrously affect the U.S.’s expanding Bitcoin mining industry.
With electricity costs accounting for a sizable chunk of miners’ operating costs, significant amounts of processing power and energy are needed for Bitcoin mining. A 30% tax on these expenses would significantly raise mining operations’ financial burden and possibly make them unprofitable.
Senator, CEO Kicks, Warns of Eminent Destruction of Mining Industry
The DAME tax’s proponents contend that it is imperative to address worries over the effects of Bitcoin mining on the environment. Critics have long expressed worries about the process of carbon imprint. Defending the new law, supporters say the purpose of the proposed tax is to encourage miners to switch to renewable energy sources and more environmentally friendly operations.
SunnySide Digital CEO Taras Kulyk, speaking to DL News, says implementing such a law on digital currency miners will deliberately kill the industry and move billions of dollars of investor funds out of the United States. Some industry key players believe this is a move to contain the price of Bitcoin, which has already reached a new all-time high at $71,922, and introduce the Central Bank Digital Currency (CBDC).
However, Cynthia Lummis, a popular United States Senator, has stood in opposition to the new tax proposal, considering her latest post on X. According to Senator Cynthia, a 30% tax on the miners would destroy the mining industry in the United States, even though theirs is a provision for cryptocurrency in the budget.
More Criticism Floods in, As Gryphon Digital Mining CEO Comments
Opponents of the tax idea contend that rather than addressing environmental issues, the measure will impede the advancement of environmentally friendly mining technologies. They cite the industry’s rapid progress toward a more ecologically friendly future, as evidenced by the spread of sustainable practices among Bitcoin miners and the quick development of renewable energy.
The United States cryptocurrency community is divided at the moment. As of press time, Bitcoin mining in the U.S. is in jeopardy as legislators consider the possible advantages and disadvantages of the DAME tax.
Speaking about the consequences of this action, the Gryphon Digital Mining CEO, Rob Chang, while speaking to DL News, stated that the new tax trend will hugely affect the United States BTC mining operations.
He warned that if the law is passed, it will render smaller miners obsolete hence, uneconomic. He added that the implication would be a massive relocation of this set of miners to an affordable location outside the United States.
Rob Chang Reference 2021 Chinese Ban, Warms of a Repeat
When signed into law, the new tax policy will be segmented in three years, as stated thus: 10% for the first year, 20% for the second year, and 30% for the third year. This law is coming a few years after the presidency, has forecasted to save up to $3.5 billion over 10 years to partially offset the expenses of the administration’s more extensive infrastructure and climate measures.
Rob referenced the Chinese cryptocurrency ban in 2021, explaining how Chinese miners flocked out of the country in search of more conducive jurisdictions. On his X handle, Riot Platforms Head of Public Policy Brian Morgenstern said that such a move might go contrary to the actual purpose, as very little tax revenue would be collected instead.
Morgenstern believes such a decision will harm the United States’ initial purpose. That the so-called law would make the clean energy project absolute, pushing low-income miners to (what he called) a “dirtier grid.” He warned that this can increase the emissions thus, worsening the carbon footprint in the cryptocurrency industry.
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