President Joe Biden has proposed a 30% tax on electricity used by crypto miners in the United States as part of his budget proposal for 2025. The proposal aims to address the lack of specific laws regarding digital assets apart from broker and cash transaction reporting.
Implications for Crypto Mining Firms
If implemented, crypto mining companies would need to report the amount and type of electricity used, as well as the value of the electricity if purchased externally. Miners leasing computational capacity would also need to report the value of the electricity from the company leasing the capacity, which would serve as the tax base.
The tax would be effective for taxable years after Dec. 31, 2024, and would be introduced gradually: 10% in the first year, 20% in the second year, and 30% in the third year. It would apply to firms generating their own electricity and those using "off-grid" power sources.
Industry Concerns and Opposition
Pierre Rochard of Riot Platforms noted that even miners using solar or wind power would be affected. He sees the tax proposal as an attempt to suppress Bitcoin and promote a central bank digital currency (CBDC).
U.S. Senator Cynthia Lummis expressed opposition to the tax, stating that while including crypto in the budget shows bullishness, a 30% tax would harm the industry in the U.S. This is not the first time the Biden administration has proposed such a tax, as a similar attempt was made in the 2024 budget proposal.
Biden administration is proposing a 30% tax on electricity used by #bitcoin miners, even if you are off-grid using your own solar and wind generation. All of the reasons they provide are pretextual, their real reason is that they want to suppress Bitcoin and launch a CBDC. pic.twitter.com/juNHvO2NBx
— Pierre Rochard (@BitcoinPierre) March 12, 2024
