GOP Rep. Warren Davidson says that a possible agreement to prevent the US government from defaulting on its debts could derail a proposed 30% tax on cryptocurrency mining. OH Rep: Default deal cancels proposed crypto tax.
OH Rep: Default deal cancels proposed crypto tax. US Looks To Avoid Default
US lawmakers release draft of "Fiscal Responsibility Act of 2023" bill, allowing government to increase debt ceiling after negotiations between President Biden and House Speaker McCarthy. Bill needs congressional approval to avoid national default, which would be an economic catastrophe. Proposed bill suspends debt ceiling for two years, allowing government to borrow money and settle debts. President Biden wanted tax increases for corporations and high-income individuals, but draft suggests they are unlikely to be implemented. OH Rep: Default deal cancels proposed crypto tax.
30% Crypto Tax Blocked?
US Congressman Davidson announced on Twitter that the proposed bill blocked several taxes, including a feared 30% tax on electricity used by cryptocurrency miners. The proposed crypto tax could result in a 10% tax increase for miners each year for the next three years, starting in 2024. Davidson called the blocking of proposed taxes a small victory.
Following the negotiations, President Biden, in an address to the press, stated,
“The agreement represents a compromise, which means no one got everything they wanted. The Speaker and I made clear from the start that the only way forward is with a bipartisan agreement. This agreement is an important step forward, and now it will go to the United States House and Senate. The agreement prevents the worst possible crisis, a default, for the first time in our nation’s history.”
Many stakeholders in the cryptocurrency space have criticized the US government and those supporting the 30% crypto tax. This criticism had arisen long before the issue of debt default came into the picture. Several prominent voices from the crypto ecosystem have hailed the debt ceiling bill.
However, the United States government still has a lot of work to do regarding the debt default deadline, which is looming and expected to hit in June. While the bipartisan agreement is indicative of lawmakers attempting to move forward, the bill still has to go through a hugely divided House of Representatives, with several Republican lawmakers openly hostile to Speaker McCarthy. Voting on the legislation is expected to take place on the 31st of May.
Crypto’s Growing Appeal
Several US states, including Arkansas, Texas, and Montana, have proposed laws to protect Bitcoin mining companies. Riot Platforms and Marathon Digital have seen significant increases in their shares since March 1st.
The Digital Asset Mining Energy Excise Tax
The Biden administration proposed a tax called Digital Asset Mining Energy excise tax (DAME) that would impose a 30% tax on the total cost of electricity consumed during crypto mining operations. However, the proposed bill faced strong opposition from the crypto community, including Democrats and prominent figures like Robert F. Kennedy Jr and Senator Cynthia Lummis, who publicly spoke against it. Senator Lummis even declared at the Bitcoin 2023 conference that the tax would not be implemented.
“America must welcome innovation, and digital assets are the future of financial innovation. A 30% tax hike on any specific industry is a blatant attempt by the administration to pick winners and losers. I will not let President Biden tax the digital asset industry out of existence.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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