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HomeNewsThe Potential Impact of a 30% Tax on Bitcoin Mining in the...

The Potential Impact of a 30% Tax on Bitcoin Mining in the US.

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  • Senator Lummis criticizes 30% tax on Bitcoin mining, warns it could push industry out of U.S.
  • The U.S. attracted significant investment in Bitcoin mining following China’s ban, strengthening its leadership in the sector.

Senator Cynthia Lummis released a report on July 23 criticizing the Biden administration’s proposal to implement a 30% tax on Bitcoin [BTC] miners’ energy consumption. This tax, according to Lummis, could push the industry out of the United States.

Reactions to the Tax Proposal

The report, titled “Powering Down Progress: Why A Bitcoin Mining Tax Hurts America,” argues that this measure would jeopardize the leadership position the United States has achieved in the Bitcoin mining sector, especially after China banned the activity in 2021. Since then, the United States has attracted investment and professionals in the sector, taking advantage of its robust energy market and favorable legal framework.

“This move endangers America’s hard-won leadership position and the future of Bitcoin mining in America.”

Cryptocurrency Mining Not a Threat According to Lummis

Lummis counters the Treasury’s justification for the tax, which is based on outdated perspectives on energy consumption and technological progress. According to the “Bitcoin Energy and Emissions Sustainability Tracker,” as much as 52.6% of Bitcoin mining could be done with minimal or no emissions .

“The U.S. is now estimated to account for more than 35% of the global BTC “hashrate,” a measure of the computing power dedicated to mining.”

Lummis argues that, far from posing a risk, Bitcoin mining strengthens U.S. energy grids.

Batcoinz
Source: Batcoinz

Laffer Curve Analysis

The senator concludes her report with a reference to the Laffer Curve, which suggests how higher tax rates could decrease total tax revenues by discouraging economic activity.

Senator-Cynthia-Lummis
Source: Senator Cynthia Lummis report

In Lummis’ words, if the U.S. does not create a stable and favorable environment for Bitcoin mining, it could lose its competitive edge and be forced to make up ground in a race it once led.

“The administration’s proposal claims that Bitcoin mining creates “risks” with local utilities on their grid operations. However, it provides no support for these claims. To the contrary, empirical evidence shows Bitcoin mining strengthens America’s energy grids.”

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: [email protected] Phone: +49 160 92211628
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