Biden wants to increase taxes for crypto miners to 30 percent

Now government led by President Joe Biden is planning large-scale tax increases. In the future, billionaires will have to give up at least 25 percent and the capital gains tax will be increased from a maximum of 20 to almost 40 percent. Crypto investors are also affected by these increases. Now, crypto mining companies are also being targeted.

USA vs. crypto: Bitcoin miners should pay

Because, as the crypto portal Cointelegraph reports, the Biden government wants the electricity used for crypto mining tax at 30 percent to reduce mining activities. Not all at once, but 10 percent spread over three years. The tax increase would still put a heavy damper on the US-based mining industry. Initially, Twitter user John Buhl had this to say about it reported who noticed the proposal in the Biden cabinet budget.

https://twitter.com/jbuhl35/status/1633924750853705729?s=20

Specifically, the letter from the United States Treasury Department states: “Any company that uses its own or rented computing resources to mine digital assets would be subject to an excise tax equal to 30 percent of the cost of electricity used to mine digital assets.” (Page 71 of the official document, PDF). And not just on electricity purchased, but also on electricity generated by the mining companies themselves: “Companies that generate or purchase electricity off-grid, e.g. B. by using the power of a specific power generation facility, would be subject to an excise tax of 30 percent of the estimated cost of electricity. The main reasons for the tax increase are the environmental impact of crypto mining, rising electricity costs for other users of the network and the overloading of the electricity networks used by the companies.

The proposal is to apply from 2024. However, because US President Joe Biden does not currently hold the two chambers of Congress, but the Republicans form the majority in the House of Representatives, it is considered unlikely that the budget plan will be implemented in its current form.

What is certain, however, is that a de facto mining ban, which would be tantamount to such a drastic tax increase, would properly rearrange the global mining market – after all, the USA is currently involved 37.84 percent by far the largest share of the Bitcoin hash rate.