Bitcoin Miners Sound Alarm On Proposed US Tax, CEO Warns Of Offshore Exodus
Bitcoin miners face a tough spot when Marathon Digital CEO Fred Thiel sounds the alarm over US President Joe Biden’s proposed tax policy.
With the possible implementation of new taxes targeting US Bitcoin miners, Thiel said the intended revenue gains could be overshadowed by an unintended consequence.
Thiel strikes a cautionary note, emphasizing that this move could inadvertently lead 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 the Biden administration unveils a proposed tax 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. According to this proposal, mining companies would be subject to a tax equivalent to 30% of their energy expenditures.
CEA argues that the industry currently enjoys an unfair financial advantage as it evades responsibility to cover the full costs associated with pollution, carbon emissions and higher energy prices.
However, Thiel raised concerns about the possible repercussions of implementing such a tax. Thiel disputes the notion that the tax would result in a shift to renewable energy sources.
He points out that the construction of solar or wind farms is already facing significant delays, with queues for interconnection that reach two years. Consequently, Thiel argues that the proposed tax measure would fail to encourage greater adoption of environmentally friendly energy solutions.
BTCUSD inches closer to the $27k level. Chart: TradingView.com
Speaking at the Bitcoin 2023 conference in Miami, Thiel expressed his apprehension on 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 of the United States.
Proposed excise tax for Bitcoin miners faces uncertain fate
In an effort to generate revenue, the Biden administration has introduced a proposal for an excise tax targeting Bitcoin miners, as outlined in a document published by the US Department of the Treasury on March 9.
The document highlights the measures proposed by the government and the financing priorities for the next year. However, it is important to note that such proposals often undergo modifications as Congress finalizes the country’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 next decade. While the government intends to secure substantial funds through this tax, its ultimate destination will be determined by the legislative process.
Projected tax revenue remains subject to the unpredictable nature of the legislative landscape.
-Featured image from Shutterstock