The recently signed debt ceiling deal would prevent the US from defaulting by possibly eliminating the tax imposed on crypto miners, especially bitcoin miners. On May 28, a draft of the bill was released by lawmakers that allowed the US government to increase its debt ceiling. Everything was set into motion right after negotiations between Joe Biden and House Speaker Kevin McCarthy.
Currently, the legislation still needs approval by Congress before taking any real effect and preventing the US government from walking into a major catastrophe. Under the proposed bill, the two-year debt ceiling suspension would enable the US government to continue borrowing money and settling its debts.
However, Biden was keen on implementing a series of additional taxes for corporations, along with high-income individuals, but the recent draft suggests that this was highly unlikely to happen.
As per the tweet shared by Rep Warren Davidson, the recent bill completely blocks all taxes proposed previously. Similarly, these taxes include the 30% tax on the overall energy used by crypto miners, which had been suggested as a part of Biden’s Fiscal Year 2024 budget. If it got passed, crypto miners would have faced a 10% tax increase over three years on electricity generated starting in 2024.
Yes, one of the victories is blocking proposed taxes.
— Warren Davidson 🇺🇸 (@WarrenDavidson) May 29, 2023
Following the negotiations surrounding the debt ceiling, 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.”
The Fate of Crypto Mining Tax
There was criticism of the US government’s decision to introduce such a tax before there was a looming debt default. With the recent developments, Bitcoin miners and other individuals in the crypto space have appreciated the debt ceiling bill.
The exclusion of the debt ceiling bill does not suggest that the debate surrounding energy costs and crypto mining would come to an end. Currently, it is still a matter of conjecture whether or not a similar proposal may be included in upcoming bills. It is still unclear how future decisions and discussions might impact the crypto industry in the US.
The crypto community has currently accepted the omission of the tax from the current bill, but no proper discussions were suggesting its complete abandonment.