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This proposed 30% tax on energy costs for cryptocurrency miners drew widespread criticism from stakeholders within the crypto-mining sector and U.S. lawmakers. Thus, the news of the omission has been widely celebrated on Crypto Twitter, as it was perceived as a victory for the broader crypto industry.
U.S. Congressman Warren Davidson confirmed the absence of the DAME tax in the debt ceiling bill and revealed “one of the victories is blocking proposed taxes” on Twitter. Davidson’s tweet was met with a positive response from Pierre Rochard, the Vice President of Research at Riot Blockchain, commenting on the commission of the DAME excise tax. However, it is essential to note that Congressman Davidson did not explicitly mention the Bitcoin tax in his response.
Cryptocurrency markets responded favorably to this development, with Bitcoin showing a 7% increase before Monday trading.
Digital Asset Mining Energy tax
The DAME excise tax proposal, first introduced on May 2, 2023, aimed to address the energy consumption associated with digital asset mining. According to the Department of the Treasury, this increased energy consumption has adverse environmental effects, can increase energy prices for those sharing an electricity grid with digital asset miners, and can pose risks to local utilities and communities.
However, the tax faced strong opposition from crypto advocates and several U.S. lawmakers, including 2024 Presidential candidate Robert Kennedy Jr. and Senator Cynthia Lummis voiced their strong opposition, with Lummis pledging to prevent President Biden from taxing the digital asset industry out of existence.
Is the Bitcoin mining tax gone?
Removing the DAME tax from the debt ceiling bill does not mean the debate surrounding energy costs and cryptocurrency mining ends. It is still uncertain whether a similar tax proposal might be reintroduced in a future bill. Furthermore, it remains unclear how future discussions might influence the cryptocurrency industry in the U.S.
This latest version of the debt ceiling bill, known as the “Fiscal Responsibility Act of 2023,” includes various other provisions, as reported by NYMag. These include a two-year extension of the debt ceiling, non-enforceable funding targets for future years, and specific changes to SNAP food assistance and Temporary Assistance for Needy Families (TANF) programs.
Looking ahead, it remains to be seen how these new developments will impact the broader crypto industry. While removing the proposed DAME tax is undoubtedly a victory for crypto miners, the ongoing uncertainty surrounding future legislation may pose challenges.
Furthermore, although the crypto community has embraced the omission of the tax from this current bill, there has been no communication to suggest that it has been abandoned. Instead, much of the conversation has risen from Rochard’s Twitter comments, a representative of an American Bitcoin miner who would be impacted by the tax passing into law. Rochard’s most recent tweet has over 120,000 views since its publication early May 29.
“#Bitcoin mining excise tax is off the table. Huge kudos @WarrenDavidson for taking the time to engage on social media, and for being one of the few that understands #Bitcoin, give him a follow!”
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