Biden budget proposal aims to reduce deficit by $74M in 2024 via energy tax on crypto miners
The Biden administration has proposed a new tax on crypto mining, as seen in a 2024 budget plan published by the White House on March 9.
Budget proposal suggests taxing mining energy
U.S. President Joe Biden has proposed a new crypto mining tax.
The administration’s latest budget paper suggests imposing a “digital asset mining energy excise tax” in one line of its tables. The addition is projected to decrease the country’s deficit by $74 million in 2024, $1.38 billion by 2028, and $3.50 billion by 2033.
In a separate explanation paper, the White House specifically suggests an excise tax of 30% on all energy costs involved in cryptocurrency mining.
That paper adds that the plan should be phased in over three years, starting at 10% in the first year, 20% in the second year, and 30% in the following years.
The government justified the proposal by noting that crypto mining requires a large amount of energy and can have a detrimental impact on the environment. It also said that mining can raise electricity prices and create uncertainty around local energy utilities.
Mining proposal is just one part of budget
The proposed mining tax is just one part of the Biden administration’s larger budget,
The budget in its entirety aims to increase spending from $6.2 trillion to $6.8 trillion while also cutting deficits by $3 trillion over a decade through tax increases.
The mining rules are also part of the Biden administration’s goal of regulating energy usage and combating climate change. A new fact sheet notes that the budget aims to invest $4.5 billion in clean energy efforts, $1.8 billion in reducing energy and water bills in low-income households, and $3.2 billion in public housing modernization, among other things.
Though unrelated to energy use, the budget will also target wash trading of cryptocurrencies. The updated tax rules could make this activity unprofitable.
It is expected that the budget will see significant opposition from the Republican party. As such, it is unlikely that it will come into effect in its current form.
