- The recent US debt ceiling agreement appears to have blocked the proposed Digital Asset Mining Energy (DAME) excise tax, which would have imposed a 30% tax on cryptocurrency mining firms.
- The proposed tax faced criticism from crypto advocates who argued that it was a selective pretext to suppress anything that threatens elite power structures.
In a significant development for the cryptocurrency industry, the recent agreement on the US debt ceiling between President Joe Biden and House Speaker Kevin McCarthy appears to have blocked some proposed taxes, including the Digital Asset Mining Energy (DAME) excise tax. This tax, if passed, would have imposed a 30% tax on cryptocurrency mining firms, a move that the Biden administration argued was necessary to limit the environmental and societal damage caused by crypto mining operations.
The debt ceiling agreement, encapsulated in a comprehensive 99-page bill known as the “Fiscal Responsibility 5 Act of 2023,” aims to suspend the nation’s debt limit until 2025, thereby preventing a federal default. It also imposes restrictions on government spending. One of the victories of this agreement, according to U.S. Congressman Warren Davidson, is blocking proposed taxes.
The DAME tax proposal, first suggested in March this year, would apply to digital asset miners operating on both Proof-of-Work (PoW) networks like Bitcoin and Proof-of-Stake (PoS) networks like Ethereum, despite the substantial differences in their energy consumption levels. Under this proposed tax framework, digital asset miners would be required to disclose information such as the amount of electricity they consume, its source, and its corresponding value. This requirement would extend to off-grid power generation, including the utilization of otherwise wasted natural gas.
However, the proposal faced criticism from crypto advocates. Democratic presidential candidate Robert F. Kennedy Jr. argued on Twitter that the environmental argument was a selective pretext to suppress anything that threatens elite power structures. Republican Senator Cynthia Lummis also criticized the proposal during the recent Bitcoin 2023 conference, stating that a thriving Bitcoin mining industry is not only a matter of national security but also an issue of energy security.
In conclusion, while the proposed DAME tax aimed to address environmental concerns related to crypto mining, it faced significant opposition from various quarters. The recent blocking of this proposed tax in the US debt ceiling agreement marks a significant development for the crypto industry, highlighting the ongoing debates and complexities surrounding the regulation of cryptocurrencies.
