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As reported by the Ohio Representative Warren Davidson, an interim deal to prevent the US government from defaulting on its debt, could eliminate the proposed 30% tax on energy use by cryptocurrency miners. In a May 28 tweet, Davidson said the bill blocked proposed taxes, including a 30% tax on electricity used by cryptocurrency miners that was suggested as part of President Biden's FY2024 budget.
If the proposal passed, starting in 2024 miners would face a 10% tax hike each year, for three years, on the electricity generated. President Joe Biden at the end of the negotiations said: "The agreement represents a compromise, which means that nobody got everything they wanted.
The agreement avoids the worst possible crisis, a default, for the first time in the history of our nation."
30% tax on crypto mining canceled in the agreement to avoid US default
The US government is not yet out of the woods with regards to the June debt default expiry.
Although the bipartisan agreement suggests lawmakers are moving forward, the debt ceiling bill still faces a divided House of Representatives, with many Republican lawmakers openly hostile to Speaker McCarthy. The governing body is expected to meet and vote on the law on May 31.
On May 28, US lawmakers released a draft law allowing the government to raise the debt ceiling, a limit imposed on the amount of debt the Treasury Department can take on, following negotiations with President Joe Biden and House Speaker Kevin McCarthy.
The law still needs to be approved by Congress before going into effect, so as to avoid an economic catastrophe for the US government. Many industry players had criticized the White House and supporters of the mining tax long before the threat of debt default became an issue.
Bitcoiners, including former Kraken growth lead Dan Held, have welcomed the debt ceiling law. The bill provides for the suspension of the debt ceiling for two years, so as to allow the US government to continue to borrow money and pay off its debts.
President Biden would have liked the deal to include higher taxes for high-income individuals and corporations, but the most recent version of the draft indicated that this was unlikely.
