Ohio Rep Says Deal To Avoid Default Nixes Proposed Crypto Tax

Republican congressman Warren Davidson has stated that a tentative deal aimed at stopping the US government from defaulting on its debts potentially scuppers a proposed 30% crypto mining tax.

US Looks To Avoid Default

United States lawmakers had, on the 28th of May, 2023, released a draft of the “Fiscal Responsibility Act of 2023” bill. The bill allows the government to increase the debt ceiling following long negotiations between President Joe Biden and House Speaker Kevin McCarthy. The debt ceiling is a limit on how much debt can be incurred by the Treasury Department. The proposed legislation still requires congressional approval before it can take effect and help the United States of America avoid a national default. A national default would be nothing short of an economic catastrophe for the US government.

The proposed bill would suspend the debt ceiling for two years, allowing the US government to continue to borrow money and settle its outstanding debts. President Joe Biden had pressed for the deal to include several tax increases for corporations and high-income individuals. However, the draft suggests that such taxes were highly unlikely to be implemented.

30% Crypto Tax Blocked?

Congressman Davidson took to Twitter to discuss the proposed bill and, in a relief to the crypto ecosystem in the US, stated that it blocked several proposed taxes. This included the proposed 30% tax on electricity used by cryptocurrency miners, which many feared would be part of President Biden’s FY2024 budget. If the proposed crypto tax passes, cryptocurrency miners could potentially face a 10% tax increase each year for the next three years starting in 2024. In a discussion on Twitter, Congressman Davidson called the blocking of proposed taxes a small victory.

Following the negotiations, President Biden, in an address to the press, stated,

“The agreement represents a compromise, which means no one got everything they wanted. The Speaker and I made clear from the start that the only way forward is with a bipartisan agreement. This agreement is an important step forward, and now it will go to the United States House and Senate. The agreement prevents the worst possible crisis, a default, for the first time in our nation’s history.”

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Author: Amara Khatri

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