On Tuesday, a notable surge in the value of Crypto Mining Stocks was observed. Reports indicate that President Joe Biden may withdraw the proposed 30% tax on electricity consumption by mining companies, driving the speculation.
The market responded positively to this news, generating increased investor sentiment.
Debt Proposal Does Not Include Tax on Digital Asset/Crypto Mining Energy
According to a statement provided by Rep. Warren Davidson (R-Ohio), the current debt proposal under consideration does not include the previously mentioned tax on digital asset mining energy.
Davidson hailed this development as a significant victory, further reinforcing their opposition to the tax.
Among the major mining stocks, Riot Platforms emerged as the top performer, experiencing a notable 10% increase in value. Additional companies in the sector, including Iris Energy, Hive Blockchain, Cleanspark, Hut 8 Mining, and Marathon Digital Holdings, also witnessed gains of 5.5% or higher.
This overall upward movement highlighted the positive response from investors.
Agreement Reached to Suspend U.S. Debt Ceiling, Excluding Crypto Mining Tax
Over the weekend, President Biden and House Speaker Kevin McCarthy (R-Calif.) reached a preliminary agreement to suspend the U.S. debt ceiling.
Importantly, Davidson confirmed that the agreement explicitly excluded the administration’s plan to impose the aforementioned tax on crypto mining.
However, it is worth noting that this agreement still necessitates congressional approval for finalisation.
Overview of the Proposed Digital Assets Mining Energy Excise Act (DAME Act)
President Biden introduced the Digital Assets Mining Energy excise act (DAME act) as part of his proposed budget for the 2024 fiscal year. Its aim was to gradually impose an excise tax on electricity costs for digital asset mining companies.
The design of the tax included a gradual increase from 10% in 2024 to 20% in 2025, and ultimately reaching 30% in subsequent years.
The DAME tax’s primary goal, according to the White House, is to ensure that crypto miners contribute fairly to local communities and environmental costs. Moreover, over a period of 10 years, the tax would generate an estimated revenue of $3.5 billion.
However, due to the current impasse, the tax proposal is presently stalled. It’s important to note that there is a possibility of reintroducing the tax in the future, depending on evolving circumstances and discussions surrounding it.
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