Topic: Biden proposed 30% mining tax. what would impact on Bitcoin mining? - page 2. (Read 574 times)

It's unlikely that the additional electricity tax will attract new miners to Bitcoin mining, as it would increase the overall cost of mining and reduce profitability, making it less attractive for new miners to enter the market.

Regarding the impact on hashpower for a 30% mining tax, it is difficult to estimate with certainty, as it would depend on various factors such as the current price of Bitcoin, the efficiency of mining equipment, and the availability of cheap electricity sources. However, in general, a 30% mining tax would increase the cost of mining, leading to a reduction in the number of miners and, in turn, a reduction in the overall hashpower of the Bitcoin network

when you say "Biden" you mean the democratic party, right? surely Biden didn't come up with this idea all on his own.  

you've got it backwards though. the idea is to pay for the power first. then generate the profits. just like a trucker has to pay up front for thieir gas before they can make that trip... gas has a built in excise tax.

so i guess ups drivers or door dash delivery drivers should be really angry how they're being double taxed due to having to pay taxes on their net income but also the excise tax on gasoline they purchase so they can operate their equipment. but you don't see them complaining about it.

that's the idea behind an excise tax is to punish or penalize people for doing some behavior that contributes to negative environmental outcomes. i disagree with an excise tax on solar power used for bitcoin mining since i don't see how that harms the environment but things like coal power plants or nuclear power or even hydro-electric even large wind turbines they all have environmental consequences thus an excise tax might be appropriate.

we all can agree that driving cars and using gasoline does have a negative impact upon the environment so the less of it we do the less we should be punished. the more of it we do the more we should be paying for that privilege. thus the excise tax. same with smoking. same with alot of things like that.

Exactly it will slow growth in USA 🇺🇸 because  it will cost more to mine it phases in

10% 20% 30%

does not start till 2024 or never 👎

A typical company earns BTC to pay for the power. It's a a standard govt double tax.
In this case it simply increases your electricity cost by 30%, so decreases your profit, and increases tax revenue from you.
Simple math.

Read the topic:

Your philosophical opinions of types of taxes are not the topic.

It's a simple - more tax, less revenue directed at mining.

Except that being able to enforce a law is hard.

I done it my wife has done it and my mom did it.

Most people talk about the power the IRS has and they do but the fucking tax code is tens of thousands of pages long.
I have two book cases of tax code books.

This proposal as written simply won’t pass. It can’t be enforced as it is written.

They already had to alter the reporting on trades my tax return had 117 pages of trades for a capital loss of 3200 usd last year.

To correctly review my return fully line by line would take two people two weeks and they would find I did it correctly.

I ask you if you rent from nicehash are you renting a s19 xp burning 21 watts a th at 5 cents located in the usa

or am i renting from nicehash a s19 xp burning 21 watts a th at 2 cents located in russia

So in order to decide this would mean court rulings and the IRS does rulings based on a one case per ruling.

Ie if I win and the say my power cost was 2 cents a th in russia the ruling applies to me. and no one else.

I can tell you they don’t have the manpower to enforce the excise tax across the board.

So they will do selective enforcement. My mom my wife and I have all worked on selective enforcement projects.

My mom is dead I quit the IRS twenty years ago and my wife retired 11 years ago. We still know people in the IRS and We are absolutely certain the IRS does selective enforcement. IE low lying fruit is selected first.

So a 2 megawatt farm will be paying a 10 percent bump on power if the bill is written the way it is worded in the link above.

So there is a small chance your power bill will go up 10 percent in 2024.

Then a new election happens in 2024 and maybe the bill if it is written and passed gets cancelled.

The 30% is actually Biden's proposal, so it's a bit of a long question if it can be approved, I'm also sure that most of them will not agree with what Biden wants to happen.

That's a huge amount in fact, it seems like Biden wants to legally rob the people, the proposals he's making that are 30% are out of the question. Woe to those who will be hit when that becomes their law.

it's not a double tax on bitcoin income. they would be taxing the electricity expense. not the income from mining. two different things.

so you're against paying excise tax for gasoline?


example: you had electricity expenses of $1000 in some month. you pay 30% of that in excise tax, or $300. but lets say you didn't make a profit from mining? i guess you still have to pay the tax.

Standard govt double dipping scam.

You pay tax on your bitcoin income but they wanna tax you twice on how you spend that already taxed bitcoin income.

Nothing new, hopefully it fails.

i guess the next thing you're going to tell us is paying crypto taxes is unenforceable.

you pay the tax no matter where it is based. as long as you live in the usa.
you got income from a mining activity and you live in the usa, you pay the tax. or you're a tax evader. simple as that.

best bet is to not try and cheat the IRS because you will be caught. 

Dude I worked for the IRS for 18 months.
I have a degree in accounting.
My wife worked for the IRS for 33 years she was a Revenue agent.
My late mother worked for the IRS for 25 years she was a Revenue officer.

If I say it is unenforceable in a mixed use business it pretty much is.
If I say it is unenforceable in a small home with a few pieces of gear it is.

I know it is enforceable in a big farm.

If you are a big farm and all you do mine it is enforceable and would be enforced since at least 25% of the network is large farms in the USA.


It is strictly based on the power used to mine.
So in a 2 mega watt farm it would be detected and enforced.

On a 1 kwatt miner in his home no one is going to be able to enforce it.

I know from my own experiences with multiple friends and family in the IRS.

If you read the law as it in the link above it says renting from nicehash would be taxable.

A) prove where the nicehash gear you rented was usa based = can not be done
B) prove the power used by the nicehash gear if you say it was usa based = can not be done.

So this is why the law will not be enforceable across the board.

if you file a tax return and report any type of mining then you would kind of be on the hook. so a business would need to lie to the IRS for it to not be enforceable...

they always put the IRS in charge of collecting this type of taxes on peoples tax returns. so yeah unless you're going to lie to the IRS and pretend like you're not mining bitcoin then as soon as you file a schedule C showing you're running some type of bitcoin mining (for profit or loss), they'll probably have a form to fill out for computing your excise tax. just how the IRS works.



keep the democrats in power and it might just happen eventually.  

unless bitcoin miners band together and try and fight it i don't see the general public getting too up in arms about it since bitcoin mining is such a niche thing and most americans have no idea about it and don't even care. but maybe some of the big bitcoin mining farms that opened up in texas or wherever else would put some money some good legal representation because if not then no one will.

If and that's a BIG 'if' it is passed, 1 immediate action will it being fought in the courts for the simple reason being that unlike the largely Federaly funded interstate highway system, the electrical power systems aka 'the Grids', are not paid for by the US government. They are a collection of 5(?) regional Public Utilities that are pretty much non-federally funded. Hell, many even sell Bonds or shares as Publicly Owned business entities.

To me at least, that means the US gov has no legal standing to arbitrarily tax a specific use of the US power system which they all in all have no control over. At best that decision is a per-State issue followed by the actual regional grid operators

this is not a tax on profits it is a tax on the power cost.



so year 1  $10000 power cost becomes 11,000
year 2.     $10000 power cost becomes 12,000
year 3      $10000 power cost becomes 13,000

It is pretty much not enforceable for smaller mixed use business.

or for a home owner.

Plus it likely won't pass.

 
But the thing is tax is not seasonal though the tax is deducted from the net profit, it is still a huge profit loss on the part of miners.  But I wonder how would the government calculate the tax of the individual.  Are they letting the individual to report of the gain or they will set a standard?


Definitely those who live outside the US is exempted on this tax but as far as we know the US is ocountry that has the most hash rate and that 30% tax for the US based miner is too huge, if implemented I am seeing miners moving out of the country.  I think this will give way for other countries like Kazakhstan and Canada to be the 


I think not everyone but I do believe that those who have the capability like huge mining farm will move out of the country and will settle on a more miner-friendly government that has cheap electricity cost.

they just want you to work and pay your taxes and not have anything to do with any other businesses outside of the usa. if you can put up with that then you might be happy.   


enjoy it while it lasts, buddy. something tells me all good things come to an end though. hope it doesn't for you.

. the best states do true net metering. 2 or 3 of them.

NJ does it due to all the midwest coal plants.

USA sucks to begin with in the first place.

never heard of 1 for 1 swap. i always heard people saying you sell it to them for way less than they sell it back to you at. plus you can only offset your electricity bill you can never end up with a credit, that's what i heard too.

but when you do it that way, you would owe the excise tax when you get it back from the grid. everything you get from the grid would get taxed that 30%. but if you had a battery system it would still get taxed there's no way around paying the tax from your solar. you're still using it. you're just storing it somewhere before you use it. right?

it is 1 for 1 swap.

the 275 kwatt array uses 60 kwatts during sunlight and sends 215 kwatts to the grid.

the grid is a free battery. so when it gets dark they owe me the 215 kwatts .

that would be more like 6 x 215 as we average 6 full hours a day. most people dont realize the first 3 and last 3 hours each day are shitty for charging so a decent location is about six hours a day.

And thanks to Al Gore and his financial cronies, said coal power plant no doubt purchases carbon credits so on paper they are 'low CO2 emissions'.  
That particular setup is also an outlier. Mines are setup where there is:
a. Abundant low cost power.
b. Friendly local governments.

Regarding 'a', the massive amounts of power the largest farms use is there because there is not enough local loads to run the power plants at maximum efficiency and it cannot be economically be sent across 'the grid(s)' to be used elsewhere. The farms that were once located in the Pacific Northwest existed because of the large hydroelectric dams that were built to power several massive aluminum refining plants all mostly owned by Alcoa. When those plants were shut down during the 90's & early 2k's the utilities needed a huge 'local' load to justify operations. When miners and data farms moved in everyone was happy. Finally around 2013 Canada established a high-tension link between the Northwest and their grid to buy power from the dams who now had a market willing to pay more for that power. That more than anything is what drove PUC to all but shut down large mining farms... In that case, also 'b' was not present.

These days the same supply/demand economics apply. Yes Texas has massive wind farms and guess what - they produce far more power than is usually needed to feed the all but isolated Texas power grid ran by ERCOT. It has only 2 ties to the rest of the national grid system and they are pretty limited in how much power can be sent through them. Now in their case the overcapacity was purposely built to accommodate local weather conditions and the amount of power produced & needed in the local areas. When there are poor winds in one area odds are they are good in enough other areas to cover it. That said, the end result is usually far more power than Texas can use.

Enter mining farms. Most folks have at least heard of the deals that ERCOT and the mega farms in Texas have: The farms get to soak up the excess power at reasonable rates but with 1 caveat - whenever circumstances require it (most often because of weather) the farms have to throttle back their power usage and even stop running entirely until things change. So much for 'the power usage harming other users'...

Yes ERCOT pays the farms a stipend for not running but it is a fraction of what the mines would earn if running plus that diverted power is still being used/bought by the other consumers that need it. Still, given how easy it is to switch a mine on & off vs any other type of mega power hungry industry to free up that power to be sent where it is needed more, not a bad deal. ERCOT gets to build up their safety net of over-capacity knowing they have a line of buyers waiting to get some of that (conditional) excess power. Win-win for all involved.