US declares war on Bitcoin miners, proposes “special tax”.

To balance its bills, the US government has proposed tax increases for a range of companies operating in their countries. One of them is mining Bitcoin and other cryptocurrencies, mentioned on page 78 of the extensive official document.

Basically, the Treasury Department wants Bitcoin miners to pay 30% more than they currently pay for electricity. Such an increase would be phased in over a period of three years.

Another point that stands out is that companies would have to pay extra for this, even if they do not use the standard network, ie if they are powered by private installations.

30% special tax for Bitcoin Miners

By calling the proposal a “special tax”, the US government is once again starting a battle against cryptocurrencies. This time the target is Bitcoin miners, who are not doing very well financially.

“Any company using computing resources to mine digital assets would be subject to an excise tax equivalent to 30% of the cost of electricity used in mining.”

The text then indicates that this increase would be gradual. That is, an increase from 10% in the first year, to 20% in the second and finally 30% in the third year and beyond.

Another point worth noting is that this tax would even be levied on mining companies that purchase electricity from third parties, off the grid.

“Companies that produce or buy off-grid energy, for example by using the output of a particular power plant, would have to pay an excise duty equal to 30% of the estimated cost of electricity.”

Finally, in addition to the money from the new tax, the US also wants to collect data about the Bitcoin mining industry. After all, miners would have to disclose both the amount and the cost of production, which could be used against them in the future.

Miners are not doing very well financially

While the largest mining company in the US went bankrupt in December last year, many others have to sell all their produced bitcoins to cover electricity costs, which have skyrocketed due to dollar inflation.

In addition to these high costs, the sharp fall in Bitcoin and the increase in the network hash rate in recent years have also shaken up the industry. That is, miners had their profits squeezed due to low BTC and increased competition.

Therefore, many industry players are already vulnerable and this “special tax” proposed by the US should make their operations even more difficult. Finally, the US is estimated to be the largest Bitcoin producer in the world, with 37.8% of global production.

Source: Live Coins