Debt ceiling bill closes the doors for 30% crypto mining tax.
Ohio Representative Warren Davidson has revealed that a tentative deal to prevent the US government from defaulting on its debts is expected to omit a previously proposed tax on energy consumption by cryptocurrency miners.
In a tweet dated May 28th, Davidson indicated that the bill had blocked the way for "proposed taxes," including a 30% tax on power consumed by cryptocurrency miners. It is worth noting that the tax proposal was introduced as a part of President Biden's FY2024 budget.
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If the original proposal was approved, starting from 2024, miners would have encountered an annual 10% tax increase over three years on the electricity they utilized.
The proposed mining tax had drawn criticism from many in the cryptocurrency sector, even before the looming debt default became an issue.
On May 28th, US lawmakers unveiled a bill drafted to enable an increase in the debt ceiling. This legislation resulted from negotiations between President Joe Biden and House Speaker Kevin McCarthy, and it now awaits Congressional endorsement to prevent an imminent economic disaster in the United States.
The bill proposes a two-year suspension on the debt ceiling, granting the US government permission to borrow and repay its debts. Although President Biden initially sought to include specific tax hikes for corporations and wealthy individuals in the deal, the recent draft of the bill suggests these increases are unlikely.
When commenting on the agreement, US President Joe Biden stated:
The agreement <...> represents a compromise, which means no one got everything they want. The agreement prevents the worst possible crisis, a default, for the first time in our nation's history.
Bitcoin (BTC) enthusiasts, such as former Kraken growth lead Dan Held have praised the debt ceiling bill.
Although this bipartisan agreement signals progress, the US government isn't yet clear about the impending debt default deadline set for June.
While being a beacon of hope, the debt ceiling bill still has to navigate through a divided House of Representatives, with several Republican lawmakers showing marked resistance towards Speaker McCarthy. A meeting to vote on the legislation is scheduled for May 31st.
