The upcoming vote on the US debt ceiling deal in the House of Representatives will not include the proposed 30% excise tax on fuel usage by crypto mining.
Surprisingly, the recently unveiled 99-page debt deal on the House committee website is conspicuously devoid of any clauses pertaining to the implementation of wash trading tax regulations on digital assets or other tax measures targeting cryptocurrencies, which had been strongly supported by the Biden administration, news reports said.
Initially introduced in March as part of the annual budget proposal, these measures were estimated to generate substantial revenue for the federal government. The Treasury Department projected that the application of wash trading rules alone could bring in about $24B over the next decade.
However, the preliminary agreement reached by Congressional and White House negotiators focuses on raising the debt limit rather than implementing tax increases. Although the deal imposes caps on non-defense national spending, it still awaits votes in both the House and Senate and faces skepticism from both sides of the political spectrum.
The proposed mining energy excise taxation aimed to curb energy consumption by levying a surcharge equal to 30% of the electricity expenses incurred by cryptocurrency mining companies. The tax would have been phased in above three years, beginning at 10% in its first year.
The March budget proposal justified this tax by highlighting the negative environmental effects associated with the growing energy consumption of digital purchase mining. It also acknowledged the potential environmental justice importance, increased energy prices for those sharing the same electricity grid as miners, and the uncertain nature of mining activities, posing risks to local utilities and communities.
