Is Biden’s controversial bitcoin mining tax dead or destined to rise from the ashes?

Bitcoin (BTC) miners in the United States can heave a sigh of relief, as a proposed tax on crypto mining has not made it into the bill to raise the US debt limit which appears to be set to pass.

The Digital Assets Mining Energy (DAME) Excise Tax proposal called for crypto miners to be taxed equal to 10% of the cost of electricity used for mining in 2024, rising to 30% in 2026.

The tax was highly controversial, with critics arguing that it had the potential to increase global emissions as a result of miners being forced to move overseas, where countries could produce more emissions during energy production.

Additionally, bitcoin miners seek cheap energy, and with one of the cheapest sources of energy being excess renewable energy, bitcoin miners can actually incentivize their production by providing utilities with a buyer for energy that would otherwise be scarce. will be ruined.

On May 28, Pierre Rochard, vice president of bitcoin miner Riot Platforms, noted that there was no mention of a DAME tax in the proposed bill, to which Representative Warren Davidson responded that it was “one of the victories” of the bill.

Yes, one of the victories is stopping the proposed taxes.

— Warren Davidson (@WarrenDavidson) May 29, 2023

Dead and Buried or Ready for a Comeback?

While much of the online discussion surrounding the news suggested the proposal was “dead”, others, such as Coin Metrics co-founder Nick Carter, highlighted that it was only temporarily defeated. , hinting at the possibility of it being included in future bills.

Bitcoin mining “DEM” tax defeated (for now)

Biden CEA, especially Heather Bushey, is l https://t.co/hJgZ7oUGub

— Nick Carter (@nic__carter) May 29, 2023

car driver suggested A later May 29 Twitter thread stated that the administration would likely try to shove it into an omnibus bill and would have already done so if it had the political currency to do so.

But bills would need to pass through both Congress and the House, and considering the Republican Party generally opposes tax increases and currently controls the House, it seems unlikely that such a bill would pass. Omnibus bills would be able to make it to the President’s desk.

Senator Cynthia Lummis speaking with Chamber of Digital Commerce founder and CEO Perianne Boring during a fireside chat on May 20 at the Bitcoin 2023 conference in Miami Gave Assurance Onlookers think the DAME tax is “not going to happen.”

Lummis said that ensuring that bitcoin mining firms remained in the US was important for both national security and energy security, highlighting how bitcoin mining could reduce gas flaring emissions and stabilize the energy grid. can help to do.

Cointelegraph contacted the White House asking whether it plans to continue with the DAME tax but did not receive a response.

Has the damage already been done?

Responding to Cointelegraph’s questions, Fred Thiel, CEO of bitcoin miner Marathon Digital Holdings, suggested that whether or not President Joe Biden’s administration decides to continue with the DAME tax, it will continue its anti-crypto agenda, saying:

“I think it is clear that this administration will continue to oppose the crypto sector broadly, and even though this specific tax is no longer on the table, it will likely be one of the more misguidedly targeted efforts to bring down the industry. is not final.”

Those within the crypto industry and even some US lawmakers agree with this, arguing that, among other measures, the US government is trying to discourage banks from working with crypto firms. making coordinated efforts – aka Chok Point 2.0 – under the guise of ensuring the financial system remains stable and safe.

When businesses make long-term decisions, they typically want to reduce risk. Therefore, given the option of operating in a region with clear, crypto-friendly policies, where regulations are unclear, and policies more likely to harm the competitiveness of US-based activity, companies will generally choose the former.

Thiel highlighted how the actions of the US government and regulators weigh in on business decisions when speaking to Cointelegraph, saying, “Despite the possibility of passage of the DAME tax, Marathon has already diversified our locations of operations.” started bringing it.

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Thiel said that “with regulation around mining being so unclear,” his firm has made a strategic decision to diversify its operations, instead focusing on its footprint in the US.

He pointed to his firm’s May 9 announcement that it would build two new mining facilities in Abu Dhabi.

Abu Dhabi is a region that has made a concerted effort to attract crypto-related investment through its clear regulatory regime, which has been hailed as pro-market.