Rep. Warren Davidson states that legislation on the U.S. debt ceiling blocks proposed taxes, including a 30% tax on electricity for crypto miners.
A preliminary agreement aimed at preventing the United States government from defaulting on its debts is anticipated to remove a proposed tax on the energy consumption of cryptocurrency miners, as indicated by Ohio Representative Warren Davidson.
Unveiling of Preliminary Bill to Raise U.S. Debt Ceiling
On May 28, legislators in the U.S. unveiled a preliminary version of a bill that would grant the government the ability to raise the debt ceiling, which is a limit on the amount of debt the Treasury Department can incur, following negotiations with President Joe Biden and House Speaker Kevin McCarthy.
However, the bill still requires congressional approval before it can take effect in order to avert what could potentially be an economic catastrophe for the U.S. government.
Under the proposed legislation, the debt ceiling would be suspended for a period of two years, enabling the U.S. government to continue borrowing money and fulfilling its financial obligations. President Biden supposedly desired the agreement to include certain tax hikes for corporations and high-income individuals, but the latest draft suggests that this is unlikely to occur.
Annual Increase in Electricity Taxes for Miners
In a tweet on May 28, Representative Davidson stated that the bill would block various “proposed taxes,” including a 30% tax on the electricity consumption of cryptocurrency miners, which had been put forward as part of President Biden’s FY2024 budget.
If the latter proposal had been enacted, miners could have faced an annual 10% increase in electricity taxes over a three-year period, starting in 2024.
Criticism of the White House and proponents of the mining tax had already emerged within the industry long before the threat of a debt default emerged as a concern.
Individuals in the Bitcoin community, including former Kraken growth lead Dan Held, commended the debt ceiling bill.
However, the U.S. government is not yet entirely clear on the risk of a debt default, which is anticipated to occur in June.
Although the bipartisan agreement suggests that lawmakers are making progress, the debt ceiling bill still encounters opposition in the divided House of Representatives, with many Republican lawmakers openly hostile towards Speaker McCarthy. The legislative body is expected to convene and vote on the bill on May 31.
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