US authorities to impose 30% electricity tax on crypto mining
The President Joe Biden administration has proposed imposing a 30% electricity tax on crypto mining operations in the United States. The move is attracting severe criticism from industry players.
Despite the unfavorable market conditions and FUD that have plagued the web3 space since last year, the President Joe Biden regime is set to introduce a new tax rule that will make life even more difficult for crypto market participants in the US.
According to the administration’s fiscal year 2024 revenue proposal document released by the Department of the Treasury on March 9, miners of proof-of-work (PoW) crypto assets like bitcoin (BTC) will soon be required to cough out a 30% tax based on their electricity usage.
The proposed electricity tax rule is expected to be implemented over three years at 10% annual stages beginning December 31, 2023. The government also plans to apply the wash trading rules that govern securities, such as stocks, to crypto.
A section of the document reads:
“The wash sales rules would be amended to add digital assets to the list of assets subject to the wash sale rules. Except as otherwise provided by the Secretary, the term ‘digital assets’ means any digital representation of value which is stored on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.”
Crypto Twitter reacts
As expected, the proposed rules have been condemned by crypto proponents on social media, with @0xfoobar describing the move as anti-American authoritarianism.”
Last week, reports emerged that US authorities plan to clamp down on bitcoin miners using natural gas to power their operations without paying the necessary royalties.