Senator Cynthia Lummis slams Biden administration’s proposed 30% tax on Bitcoin miners

On July 23, Cynthia Lummis published a report arguing against the Biden administration’s proposed 30% excise tax on energy consumed by Bitcoin miners.

Lummis argues that such a tax could seriously affect the growing Bitcoin mining industry in the US, based on what she describes as “unfounded concerns” about environmental pollution and risks to the energy grid.

Lummis’s critique

“Even if we assume the administration’s goals are genuine, this tax should still be rejected,” Lummis argued. He described the proposed tax as a poorly designed policy that could have serious effects, undermining its stated goals.

The dangerous tax scheme of the Biden administration #Bitcoin miners is a blatant attack on innovation, energy abundance and American excellence.

Read my orange paper refuting this disastrous proposal below ⬇️ ⬇️⬇️ https://t.co/5OCYiXttu6

— Senator Cynthia Lummis (@SenLummis) July 23, 2024

Lummis warned that the proposed tax could drive Bitcoin mining operations abroad to more favorable jurisdictions. He cited the fallout from China’s ban on Bitcoin mining, where 90% of the industry was shut down or relocated. She explains that since energy is the main cost of Bitcoin mining, even small tax increases could be devastating.

“If the United States imposes a blanket tax on Bitcoin mining, a similar exodus could occur here, leading to a loss of economic benefits and job opportunities for American communities.”

The administration claims that Bitcoin mining puts local utilities and network operations at risk, but it lacks empirical support. Lummis argues that Bitcoin mining can strengthen energy networks. He explained that miners can quickly adjust power use to balance supply and demand, avoiding blackouts.

In Texas, Bitcoin miners have worked with ERCOT to stabilize the grid during peak demand, selling 1,500 MW during winter storms Elliot and Heather. Data from August 2023 shows that Bitcoin miners provide an interruptible load equivalent to 25% of all utility battery storage in the US and Canada.

A 2023 study found that Bitcoin mining could be ten times more effective than current technology in restoring network frequency during disasters. Lummis noted that Bitcoin mining rigs, like electric vehicles, are all-electric and increasingly use cleaner energy sources.

The Bitcoin Energy and Emissions Sustainability Monitor estimates that up to 52.6% of the energy used by Bitcoin miners is emission-free and improving. A KPMG report also found that Bitcoin mining uses as much energy as household appliances such as dryers.

Economic and infrastructure benefits

Lummis argued that Bitcoin mining already shows promise as an important part of improving America’s energy infrastructure. “At this stage, we should continue to study the effects of the rapid deployment of this technology and allow it to mature. Threatening the industry with aggressive taxes would only leave America’s infrastructure stuck in the past,” he said.

Lummis highlighted the economic benefits of Bitcoin mining for underserved areas, noting that miners are legitimate tax-paying American businesses that contribute significantly to community development, especially in rural or economically depressed regions. .

The report concluded with a warning: “If America fails to create a stable and supportive environment for Bitcoin mining, we risk squandering the advantages we currently enjoy and may find ourselves playing catch-up in a race that we previously had every opportunity to lead.”

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!