Senator Cynthia Lummis criticized Biden Mining Tax, claiming that Bitcoin mining consumes as much energy as household appliances such as tumble dryers.
Lummis issued a report on July 23 that opposed the Biden administration’s proposed 30% excise tax on the energy consumed by Bitcoin miners.
The report, “Powering Down Progress: Why A Bitcoin Mining Tax Hurts America,” emphasized the advantages of the critical mining infrastructure to the United States’ energy grid, bringing the Bitcoin mining industry into sharper focus.
She cited the Bitcoin Energy and Emissions Sustainability Tracker as evidence that Bitcoin mining is cleaner than is commonly imagined. He noted that up to 52.6% of BTC mining could be emissions-free.
The senator, who was pro-crypto, subsequently focused on the growing significance of Bitcoin mining facilities in protecting the energy infrastructure. Mining facilities are extensive, dynamic electrical loads that can be employed to balance and redistribute energy to electrical infrastructures during periods of need.
The ongoing endeavors of the Electrical Reliability Council of Texas (ERCOT) and Bitcoin miners to stabilize electrical infrastructures are the most compelling examples of this. The Republican lawmaker clarified that Bitcoin producers could sell 1500 megawatts of energy back to the grid during peak demand in 2022. 2024, a comparable scenario transpired, as the Bitcoin mining infrastructure served as a Controllable Load Resource for the Texas grid during winter storm Heather.
Regulators environment would be adversely affected by a 30% tax
The Wyoming senator elucidated that imposing a 30% excise tax on Bitcoin processors would discourage them from exploring sustainable energy sources and innovative energy recycling methods. Although Lummis provided the example of sequestering methane from garbage dumps to mine Bitcoin, El Salvador has similar examples, as the government utilized volcanic energy to mine 474 Bitcoin.
In the Satakunta region of Finland, an entire community of 11,000 individuals is warmed by excess heat produced by a Marathon Digital mining facility, another example of the energy efficiencies introduced by Bitcoin mining.
Earlier this year, the mining giant signed an agreement with Kenya’s government to develop further the country’s renewable energy sector, which is already a thriving industry that supplies up to 80% of the country’s energy requirements.
Final Look is Laffer Curve
Cynthia Lummis concluded her report by contending that the industry will depart the United States as a result of the escalating taxes on Bitcoin miners, thereby diminishing the desired tax revenues. The Laffer Curve is the term used to describe the inverse relationship between tax rates and tax revenue.
As the senator noted, this has already occurred in China, as the 2021 mining prohibition resulted in the extinction of the once-thriving mining industry.
The preponderance of the Bitcoin network’s hashrate was controlled by Chinese miners before the ban.
