Biden calls for a 30% tax on crypto mining – Should you be concerned?

The U.S. government finds itself in the spotlight once again for its purported focus on the crypto mining industry. President Joe Biden has unveiled plans to revive a tax proposal that could have far-reaching implications for the entire sector.

Industry leaders and advocates, alongside crypto-friendly Senator Cynthia Lummis, have voiced their apprehensions regarding reintroducing this proposal.

Taking to X Lummis remarked, 

“The White House 2025 budget is incredibly bullish on crypto assets, some might even say they believe it’s going to the moon. But a proposed 30% punitive tax on digital asset mining would destroy any foothold the industry has in America.” 

The controversial revenue proposal 

The US Treasury’s 2025 revenue proposals, drew attention after Pierre Rochard, Riot Platforms’ VP of Research, posted,

“Biden’s 2025 budget is very bullish on Bitcoin, the White House expects $250k by 2035. They are counting on it for their tax revenues!” 

This prompted discussions in the crypto community about the U.S. government’s BTC stance. 

The 2025 budget proposal aims to generate over $10 billion from digital assets. It includes reintroducing a 30% tax on crypto mining, first proposed in the 2024 Budget.

This tax would be implemented gradually over three years, starting with a 10% tax in the first year, escalating to 20% in the second year, and ultimately reaching 30% after that.

Perianne Boring, CEO of the Chamber of Digital Commerce, criticized the proposal, 

“Bitcoin mining is advancing energy security. The White House’s proposed tax is another politically motivated attempt to pick winners and losers. We will fight to keep innovation in America.” 

Similarly, the Digital Power Network labeled the tax as “punitive” and “misguided,” aiming to stifle an industry driven by renewable energy.

“This proposed tax is a backward step.”

The adverse effects 

This sentiment is compounded by the fact that even miners utilizing renewable energy sources are being targeted, as highlighted by Rochard.

“All of the reasons they provide are pretextual, their real reason is that they want to suppress Bitcoin and launch a CBDC.”

Under the proposed regulations, any firm involved in digital asset mining, irrespective of its energy efficiency, would be subject to a hefty 30% excise tax on electricity costs.

This development has been met with strong opposition from the crypto community, who see it as yet another attempt by the U.S. government to impose restrictive measures.