The Biden administration has proposed a new tax on cryptocurrency mining, as seen in the 2024 budget plan released by the White House on March 9. Meanwhile, the value of Bitcoin, the largest cryptocurrency, continues to fall. Here are the details…
Budget proposal proposes taxation of cryptocurrency mining
US President Joe Biden has proposed a new crypto mining tax. The administration’s latest budget document proposes to impose a “crypto-asset mining energy consumption tax.” This tax is expected to reduce the country’s deficit by $74 million in 2024, $1.38 billion in 2028 and $3.50 billion in 2033. In a separate disclosure document, the White House proposes a 30 percent excise tax on all energy costs specifically involved in cryptocurrency mining.
This document adds that the plan should be implemented gradually over three years, at 10 percent in the first year, 20 percent in the second year, and 30 percent in subsequent years. The government justified the proposal by stating that crypto mining requires large amounts of energy and can have a detrimental effect on the environment. He also said that mining could increase electricity prices and create uncertainty around local energy utilities.
Mining offer is only part of the budget
The proposed mining tax is just one part of the Biden administration’s broader budget. As we reported as Kriptokoin.com, the entire budget aims to increase spending from $6.2 trillion to $6.8 trillion and at the same time reduce deficits by $3 trillion in ten years through taxes. Mining rules are also part of the Biden administration’s goal of regulating energy use and tackling climate change.
A new memo notes that the budget aims to invest $4.5 billion in clean energy efforts, $1.8 billion to reduce energy and water bills in low-income households, and $3.2 billion in public housing modernization, among other things. Although unrelated to energy use, the budget will also target the “wash trade” of cryptocurrencies. Updated tax rules may make this activity unprofitable. Significant opposition to the budget is expected from the Republican party. Therefore, according to some, it is unlikely to enter into force in its current form.
Bitcoin price fell sharply
Meanwhile, Bitcoin fell below $20,000 for the first time in nearly two months after Joe Biden’s latest budget plan and the collapse of “crypto-friendly bank” Silvergate. According to available data, BTC is currently changing hands at $19,939, down 8%. Bitcoin got off to a great start to 2023 but dropped as much as 5 percent in an hour on March 3 amid the uncertainty on Silvergate. The price doesn’t seem to have gone up since then.
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