Senator Cynthia Lummis (R-WY) said the Biden administration’s imposition of a 30% tax on Bitcoin miners is a “dangerous plan” and an “attack on innovation.”
She argued that such a high tax rate would undermine innovation and push mining activities abroad, undermining both economic and national security interests.
She made the statement in a July 23 social media post, announcing that she had published an “orange paper” to refute Biden’s “disastrous proposal.” The article – titled ‘The Future of Bitcoin Mining: Strategic Considerations for the US’ – provides an in-depth analysis of the economic, environmental and regulatory aspects of Bitcoin mining.
A long-time supporter of crypto, Lummis has also expressed concerns about the Biden administration’s actions regarding DeFi protocols and non-custodial wallets. She has played a key role in pushing for legislation regarding crypto.
Economic impact
Lummis’ article highlighted the significant economic benefits of Bitcoin mining, especially in rural and economically distressed areas, where they can create good-paying jobs and boost local economies.
The article cited successful mining operations in Texas, North Dakota and Kentucky, demonstrating how these projects have revitalized local communities.
The article also addressed environmental issues and advocated the use of renewable energy sources in Bitcoin mining. Lummis argued that with the right regulations and incentives, Bitcoin mining can transition to more sustainable energy practices.
The document outlined strategies to minimize the carbon footprint of mining operations, including the use of flared gas from oil fields and hydropower from existing dams. Lummis pointed to examples in Iceland and Canada, where renewable energy powers the majority of mining activities.
Regulatory and national security considerations
A significant portion of the orange article focused on the regulatory landscape. Lummis called for clear and supportive regulations that encourage innovation while ensuring consumer protection.
She proposed a balanced approach that promotes the growth of the Bitcoin mining industry without compromising its environmental and financial stability. The article suggested tax breaks for companies using renewable energy and stricter emissions standards for mining operations.
Lummis also discussed the national security implications of Bitcoin mining and suggested that promoting domestic Bitcoin mining could reduce dependence on foreign countries and strengthen America’s position in the global digital economy.
The document emphasized the strategic importance of maintaining a robust and secure Bitcoin mining infrastructure in the country to protect against potential cyber threats and ensure the integrity of the financial system.
Lummis urged policymakers, industry stakeholders and the public to engage in constructive dialogue on the future of Bitcoin mining to ensure the industry can continue to grow and innovate at a sustainable pace.