Bitcoin-Friendly Senator Cynthia Lummis Doubts Passage of Proposed 30% Excise Tax on Miners
Bitcoin-friendly Republican Senator Cynthia Lummis expressed doubts about the Biden Administration’s proposed 30% excise tax on Bitcoin miners, suggesting it is unlikely to pass through the House. Speaking at the Bitcoin Miami 2023 event, Lummis voiced her support for miners, emphasizing that their proliferation in the United States is crucial for national security.
Lummis shared her views on the excise tax during an interview with Perianne Boring, a member of the crypto advocacy group Chamber of Digital Commerce. Boring conveyed the concerns of the group’s member companies, representing 50% of Bitcoin’s hashrate, who feared being unable to operate in the US if the tax were implemented. Lummis reassured the Bitcoin community by stating that the tax proposal will not become a reality, highlighting the importance of technological development and mining in the United States.
President Biden’s excise tax proposal was quietly introduced in his 2024 budget plan, along with additional regulations targeting crypto wash trading and capital gains. The President’s Council of Economic Advisors argued that the tax would address issues of local environmental pollution and higher energy prices.
However, Lummis disagrees, asserting that Bitcoin mining is beneficial to the environment and energy grids. She cited examples from her home state of Wyoming, where miners are effectively utilized to vent waste methane from oil and gas wells, preventing its release into the atmosphere.
Lummis also emphasized the potential of Bitcoin mining to stabilize energy grids. By mining Bitcoin during periods of low energy consumption and scaling back operations during high-demand times, the grid can be effectively managed.
A similar effort occurred in Texas in July 2022, when miners halted operations to conserve energy for residential use. However, the Texas House of Representatives is considering a proposal to limit the number of miners participating in the demand response program, which financially compensates miners for going offline.
According to survey results from the Bitcoin Mining Council, the global Bitcoin mining industry had a green energy mix of 58.9% as of Q4 2022. Even if federal and state-level efforts discourage mining in the US, Lummis remains confident in the industry’s global survival. She pointed out that miners can operate anywhere, highlighting Norway’s inexpensive hydroelectric mining operations as an example. Lummis believes that opportunities for Bitcoin mining exist in both friendly and unfriendly jurisdictions worldwide.
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