Biden’s Budget Proposal for 2025 Rekindles Discussion of 30% Electricity Tax for Crypto Miners
President Joe Biden has reignited the debate surrounding implementing a 30% tax on electricity used by crypto miners in a budget proposal for 2025.
The proposal, outlined in a document titled “General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals” by the U.S. Department of the Treasury, aims to address the current gap in regulations regarding digital assets.
Under the proposed plan, an excise tax, similar to those imposed on goods such as fuel, would be levied on mining activities involving digital assets.
President Biden’s crypto miners tax would be calculated based on 30% of the electricity costs associated with digital asset mining.
The move would require mining companies to disclose the amount and type of electricity used, with firms purchasing external electricity also required to report its value.
Additionally, miners leasing computational capacity would need to report the value of the electricity provided by the leasing company, which would serve as the tax base.
The administration’s proposal is expected to come into effect for taxable years beginning after December 31, 2024.
The implementation of the tax would be gradual, with rates starting at 10% in the first year, increasing to 20% in the second year, and finally reaching 30% in the third year.
Even mining companies that generate their own electricity or acquire power “off-grid” would be subject to the 30% tax based on estimated electricity costs.
Critics of the proposal, such as Pierre Rochard, the vice president of research at Bitcoin (BTC) mining infrastructure firm Riot Platforms, argue that even those utilizing renewable energy sources like solar or wind power would be adversely affected.
Rochard suggests that
Read more on cryptonews.com
