Bitcoin Miners Sound Alarm On Proposed US Tax, CEO Warns Of Offshore Exodus
Bitcoin miners face a tough predicament as Marathon Digital CEO Fred Thiel sounds the alarm on US President Joe Biden’s proposed tax policy.
With the potential implementation of new taxes targeting American Bitcoin miners, Thiel said that the intended revenue gains might be overshadowed by an unintended consequence.
Thiel sounds a cautionary note, emphasizing that this move could inadvertently drive these miners to relocate their operations outside the country.
US President Joe Biden. Image: Andrew Harnik/Associated Press
Biden’s Proposed Tax On Bitcoin Miners
Bitcoin miners are facing an imminent threat as Biden’s administration unveils a tax proposal targeting their operations.
The White House Council of Economic Advisers (CEA) recently announced plans to impose a penalty that could severely impact mining companies’ profits. Under this proposal, miners would be subjected to a tax equivalent to 30% of their energy expenses.
The CEA argues that the industry currently enjoys unfair financial advantages, as it evades responsibility for covering the full costs associated with pollution, carbon emissions, and higher energy prices.
However, Thiel has raised concerns about the potential repercussions of implementing such a tax. Thiel disputes the notion that the tax would result in a shift toward renewable power sources.
He points out that the construction of solar or wind farms already faces significant delays, with waiting lists for interconnection stretching up to two years. Consequently, Thiel asserts that the proposed tax measure would fail to incentivize greater adoption of environmentally friendly energy solutions.
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Speaking at the Bitcoin 2023 conference in Miami, Thiel expressed his apprehension regarding the consequences of the tax proposal.
He suggested that rather than achieving its intended purpose, the tax would prompt Bitcoin miners to relocate their operations outside the United States.
Excise Tax Proposal For Bitcoin Miners Faces Uncertain Fate
In an effort to generate revenue, the Biden administration introduced an excise tax proposal targeting Bitcoin miners, as outlined in a document published by the US Treasury Department on March 9.
The document underscores the administration’s proposed measures and priorities for funding over the upcoming year. However, it is important to note that such proposals often undergo modifications as Congress finalizes the nation’s spending plans, leaving the fate of this particular tax proposal uncertain.
The proposed excise tax, if implemented, is projected to yield approximately $3.5 billion in revenue over the course of the next decade. While the administration aims to secure substantial funds through this tax, its ultimate fate will be determined through the legislative process.
The projected revenue from the tax remains subject to the unpredictable nature of the legislative landscape.
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