A deal to keep the US government from falling behind on its debt would be to remove a proposed tax on energy consumption by cryptocurrency miners, according to Ohio Representative Warren Davidson.
On May 28, the US Senate passed a bill authorizing the government to raise the debt ceiling – the limit on debt that the Treasury Department can incur – following talks with President Joe Biden and Speaker Kevin McCarthy. The law still needs to be approved by Congress before it can take effect to avoid an obvious economic disaster for the US government.
Under the proposed bill, there would be a two-year moratorium on the debt ceiling, allowing the US government to continue borrowing and servicing its debt. President Biden reportedly wants the deal to include some tax increases for corporations and high-income earners, but the latest reports suggest that’s unlikely.
In a May 28 tweet, Davidson said that the bill blocks “proposed tax,” including a 30% tax on electricity used by cryptocurrency miners to propose as part of the budget.
President Biden’s FY2024. If the latter is passed, miners may face a tax increase of 10% per year over three years on electricity produced in 2024.
“The agreement … represents a compromise, which means that nobody got everything they wanted,” President Biden said after the meeting. “The deal averts the worst crisis, default, for the first time in our nation’s history.”
Many in the space industry have been critical of the White House and supporters of the mining tax long before the fear of default became an issue. Bitcoiners, including Kraken’s former chief growth officer Dan Held, praised the debt cap.
The U.S. government hasn’t stopped short of ending the June wage bill. Although a bipartisan agreement shows the legislature moving forward, the debt bill still faces a divided House of Representatives, with many Republican lawmakers openly opposing President McCarthy. It is expected that members of the government will meet and vote on the law on May 31.
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