Sen. Cynthia Lummis (R-Wyo.) slammed Joe Biden's administration proposal to impose a 30% tax on Bitcoin BTC/USD mining operations, calling it a "blatant attack" on innovation and American excellence.
What Happened: In a so-called "orange paper" shared on Tuesday, the senator outlined several benefits of Bitcoin mining operations and how taxing them could adversely affect energy infrastructure, the environment, and the state's tax revenues.
In the report, Lummis states that mining operations help strengthen U.S. energy grids, contrary to the claims made by the administration.
She said that miners can partner with utilities to adjust their energy usage in response to fluctuations in supply and demand, thus helping to balance the grid. She specifically cited the example of Texas, the hub of Bitcoin mining in the U.S.
The pro-cryptocurrency lawmaker also raised environmental concerns, stating that the 30% levy would discourage the use of stranded energy sources such as methane for electricity generation. As a result, methane, which is a byproduct of natural gas production, would be released into the atmosphere, posing significant risks.
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Last but not least, Lummis warned about the hit to the country's tax revenues, as the 30% levy could force a miner exodus to jurisdictions with more liberal policies.
Why It Matters: Lummis' defense comes after the Biden administration proposed a punitive tax on cryptocurrency mining operations due to the “harms they impose on society.”
The Council of Economic Advisers argues that the industry currently enjoys undue financial advantages due to its lack of obligation to cover the full costs of pollution, carbon emissions, and higher energy prices.
According to a 2023 report by Visual Capitalist, U.S. was the world's largest Bitcoin mining country, accounting for 37% of the global hash rate.
Price Action: At the time of writing, Bitcoin was exchanging hands at $65,980.31, down 2.32% in the last 24 hours, according to data from Benzinga Pro.
Photo via Wikimedia Commons
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