Biden raises 30% crypto mining tax in new budget proposal

US President Joe Biden has revised the proposal for a 30% tax on electricity used by crypto miners in his 2025 budget proposal.

In a U.S. Treasury Department document titled “Overview of the Administration's Fiscal Year 2025 Revenue Proposals,” the administration highlighted that current rules do not cover digital assets outside of brokerage and cash transaction reporting. For this reason, the administration wants to remove excise taxes – taxes on goods such as fuel – from mining digital assets. The Treasury wrote:

“Any company that uses computer resources to generate digital assets, whether owned by the company or leased from others, will be subject to an excise tax of 30 percent of the cost of electricity used for mining digital assets.”

If applicable, crypto mining companies must report the amount and type of electricity they use. In addition, companies must report the price of electricity used if they buy it from abroad. Meanwhile, miners who lease computing capacity are required to inform the company that leased the capacity of the electricity price. The value is used as the tax base.

According to the administration, this proposal will apply to taxable years after December 31, 2024. The government will introduce the tax at three levels: 10% in the first year, 20% in the second year and 30% in the third year.

The tax will also apply to crypto mining companies that generate their own electricity. Companies that produce or obtain energy “off the grid” must pay a 30% tax on the estimated costs of their electricity bills.

Pierre Rochard, vice president of research at Bitcoin mining infrastructure firm Riot Platform, highlighted that even people using solar or wind power will be affected. Richard believes that this is a ploy to suppress Bitcoin (BTC) and start a Central Bank Digital Currency (CBDC).

Related: Texas Blockchain Council and Riot beat US energy officials

Meanwhile, US Senator Cynthia Lammis expressed her opposition to the proposed tax on X. .

This isn't the first time the Biden administration has tried to implement a 30% tax on electricity used by crypto miners. In the year On March 9, 2023, Biden made a similar attempt to hire miners in his 2024 budget proposal.

Magazine: Rich, Independent and Amazing Beaches: Perth's Crypto City Guide