US president has again proposed to impose a 30% tax on mining

Last year, the head of the country proposed similar measures, but they were rejected by Congress

12.03.2024 - 12:20

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What’s new? US President Joe Biden has presented his fiscal year 2025 budget proposal, which includes new cryptocurrency taxes that, according to the administration, could bring in nearly $10 billion in 2025 alone and over $42 billion over the next ten years. The proposal contains, among other things, an excise tax on mining. The introduction of such a levy was proposed by Biden last year as well, but it was ultimately not approved by Congress.

Budget proposal

What else is known? The president’s proposed budget, released on March 11, includes items on the application of Wash Sale rules to digital assets, information reporting requirements for cryptocurrency financial institutions and brokers, reporting rules for foreign crypto accounts, and an excise tax on mining.

Wash Sale rules in traditional markets are designed to prevent traders from selling investments at a loss and then quickly buying them back. According to the accompanying letter, a crypto investor, unlike an investor in stocks or bonds, can sell cryptocurrency at a loss to reduce the tax burden and then immediately buy it back.

The new budget proposal would eliminate this possibility by modernizing the tax code’s anti-abuse rules, applying its rules to crypto assets in the same way they apply to stocks and other securities.

As for mining, any industry firm using its own or leased computing power will have to pay a tax of 30% of the value of electricity spent on cryptocurrency mining. If the budget proposal is approved, the tax would be phased in over three years: 10%, 20%, and then 30%.

Senator Cynthia Lummis spoke out against such an initiative. According to her, the inclusion of cryptocurrencies in the budget shows the administration’s optimistic attitude towards this type of asset, but a high levy “would destroy any foothold the industry has in America.”

Source: Twitter.com