Biden’s 30% tax is not welcomed by crypto industry

Digital Asset Mining Energy (DAME) tax create worry on Bitcoin mining in USA

Biden administration proposed DAME tax on Tuesday, which would charge Bitcoin miners a 30 % tax on the cost of the electricity, but crypto industries are not happy with this proposal, have shared negative opinion against this decision.

 

The Bitcoin mining community is facing a new challenge that could change its future in the United States. The White House has proposed a tax called the Digital Asset Mining Energy (DAME) tax, which would make it more expensive for companies to mine Bitcoin and other digital currencies.

On Tuesday, this proposal was brought back into the spotlight as part of the government’s budget plan for the next fiscal year. The DAME tax would charge Bitcoin miners a 30% tax on the cost of the electricity they use. This tax would be introduced gradually: starting at 10% in the first year, then increasing to 20% in the second year, and finally reaching 30% in the third year.

The idea behind the tax, according to the White House, is to make sure that crypto miners contribute to covering the costs they impose on local communities and the environment. They expect that the tax could bring in $3.5 billion over the next ten years.

However, the proposal has not been welcomed by those in the industry. Taras Kulyk, the CEO of SunnySide Digital, a company that provides equipment for mining, expressed serious concerns. He believes that this tax could severely damage the digital mining industry in the US and lead to a significant loss of investment.

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Senator Cynthia Lummis, known for her support of cryptocurrency, also criticized the proposal. She argued that this heavy tax would destroy the industry’s presence in America.

Rob Chang, CEO of Gryphon Digital Mining, mentioned that the tax would make it difficult for less efficient mining operations to survive. They would likely look for other places where it's cheaper to operate. This happened before when China banned crypto mining in 2021, and miners moved their operations to more welcoming countries.

Brian Morgenstern from Riot Platforms, a major Bitcoin mining firm, pointed out that if miners leave the US because of the new tax, the government might not even collect much money from it. This could mean the tax fails to achieve its goals.

The introduction of the DAME tax has clearly caused a lot of worry among those involved in Bitcoin mining in the US. They fear it could push their businesses to other countries, which would not only affect their profits but also the position of the United States as a leader in the digital asset industry. As discussions around this tax continue, the future of cryptocurrency mining in the US hangs in the balance.