Topic: Marathon CEO Responds to Why the Miner Tax Plan Won’t Work (Read 208 times)

The proposed Digital Asset Mining Energy tax has reportedly been taken off the table, according to U.S. Congressman Warren Davidson.
https://decrypt.co/142711/us-debt-ceiling-deal-blocks-30-bitcoin-mining-tax-congressman
As the details of the agreement reached between President Joe Biden and House Speaker Kevin McCarthy on the U.S. debt ceiling were made public Sunday, one notable part of the deal appears to have blocked some taxes proposed by the Biden administration, including the Digital Asset Mining Energy (DAME) excise tax.

If passed, it would impose a 30% tax on cryptocurrency mining firms—a move that the Biden administration argued was required to limit the environmental and societal damage caused by crypto mining operations.

Pierre Rochard, VP of Research at Riot Platforms, questioned whether "the Administration's DAME excise tax proposal is gone?" given that Bitcoin mining wasn't mentioned in the text of the bill, dubbed the “Fiscal Responsibility 5 Act of 2023.” U.S. Congressman Warren Davidson (R-OH-08) responded in a tweet that, "Yes, one of the victories is blocking proposed taxes."

Now we're talking numbers, you see, that's why I am asking you to read the financial statements again.
You said 2-9% is acceptable, not please check how much have those companies paid till now, cause you're going to be in one hell of a surprise!


Why? Seems like none of the G7 is interested in that and we can only find two G20 countries that could replace the US if this stops being an option.
What major breakthrough is Bitcoin mining? I would have understood if it would be making the chips, but just hosting gear it's nothing out of the ordinary! And if we talk about revenue, the US could buy more coins that are mined in a day just by mooring one carrier rather than having it sail around the globe!

No, I don't have neighbors from that country, they were working in my neighborhood.
Maybe I should explain it in details: I don't actually mean that miners should pay zero tax, no, but tax shouldn't be very high to scare miners. If the USA governments tax miners with as between 2-9%, that will be fine and acceptable for everyone. So, by keeping low tax rates, government will still collect money from miners and will keep this business in their country instead of collecting 0 money and losing mining power. Yes, when you are the United States Of America, you have to remain top in everything, including mining.

Everything!


Nice story, so in conclusion:
- Georgia gives cheap energy 9% of the total to Bitfury
- you have neighbors who have fled the country because of super low salaries

How the f-word did having miners in the country helped the economy, that's what I am asking you!!!!
For three messages in a row, you told me how beneficial for the economy having miners is and you still are unable to give me an example of it, furthermore going full contrarian and showing me an example of how setting mining farms in a country doesn't change shit in the national economy!

So, which one is it?

They have to release financial statements but what has that to do with what was said above?
There is a small, post-soviet union country called Georgia. In 2015, this country made a deal with BitFury and exclusively for them, they created a free zone that lets Bitfury to avoid corporate taxes, VAT, import taxes and other fees. Georgian guys were working near to my house in Germany, doing some road-related stuff and we had some small talk in Russian (yes, I speak it too). They told me that this is a poor country where salaries are super low, food is expensive, etc and they have to work in western countries to feed their families in their homeland. They told me that this country is unofficially run by a billionaire and so on.
Now, my question is, think about it, why did they create a tax-heaven for BitFury? And keep in mind that BitFury uses around 9% of the country's electricity. And even keep in mind that this country imports electricity because their own isn't enough for people.
C'mon man, don't you really think that BitFury doesn't share profit with people in government?

Ok, nearly all of them Marathon, Riot, HUT8 or Hive are listed companies, they all have to release financial statements, now, out of curiosity, can you please tell me since you're so sure about it, how much those companies paid in taxes, last year for example?
As for subsidized energy we have already seen it in action so we know how "beneficial" that is!

It doesn't work like that. You think from a perspective of a pro-people approach government and completely ignore the fact that developing countries rarely prioritize their population but definitely do prioritize their own pockets.
I know all of that is a disaster but governments of small countries will do it because they'll get some big profit from these mining companies. It's simple, honest workers and tax-payers generate income for government, government subsidizes energy and taxes for mining companies and will explain their people that it's done for good to attract businessmen and innovations, bla bla bla, and then I hope you understand what's next.

Why would they unless they have excess capacity?
Cheap taxes, subsidized energy, low-paid workforce is a receipt of disaster, look at Kazachstan! 10% of the global hash rate and 7 million in taxes.


And you as government would you want to deal with this kind of company? No!
You make arguments on what the government should do but you only analyze things from the bitcoin holder perspective.


Crickets!
https://cointelegraph.com/news/banking-system-consumes-two-times-more-energy-than-bitcoin-research


While I agree with the stupid greenwashing of everything and how ridiculous the situation is there are two cases when energy consumption is dropping or keeps being nearly the same and still the country grows
- heavily industrialized countries that have no room to build more but build more efficiently,
Germany was using 5800 kWh per capita in 1980, and is using 6700 now, but the GDP per capita went up 5x times
- former communist countries that were building crap while wasting resources
Romania was using 2800 kWh per capita, is down to 2400 kwh but the GDP per capita went up 10x

But in both cases, you must have either something very inefficient to begin with or tons of money to improve it, from scratch, it is impossible.

I just don't understand what logic did Biden administration found in 30% tax of crypto mining. Okay, don't they think that there are other countries who offer better electricity price and tax-free mining zones? Yes, there are and if they actually release that tax law, they'll clearly see that the number of such countries will increase, there are developing countries that are willing to offer low taxes, cheap electricity and cheap labor to these business owners.

Not related to this theme but overall, if you think about it, you'll analyze how funny and painful at the same time how governments leave loopholes for business owners to avoid taxes but average citizen has no chance to escape it.
Companies can register their businesses in offshores and pay less taxes, taxes just make it super hard for average person to start a business.

Alas, BTC folks put themselves in big trouble when they compare how much other industries consume to BTC, if that's your only excuse, what happens next if it's no longer valid?

My argument is simple, it has been the same long before I became a miner and will remain the same regardless of my own interest of being a BTC miner or not, first thing first, the whole "green" energy is just one big scam, you don't save the world by extracting cobalt, carbon, a metal oxide, and lithium just to make a car battery using the dirtiest ways possible, killing a few dozen thousen African kids in the process, send that to a Chinese manufacturer that runs on coal and forces Uyghurs kids to work there for free, take the battery to shove it in a car to bring the total emission of that car to sometimes even higher than gasoline conventional cars, drive it to your mansion to take a yacht tour right before your next flight then think that you are saving the world just because you don't open the gas tank of your car.

Plain stupid as far as I am concerned, so now that green b.s out of the way, let's talk "economy".

Demand for energy is great for the economy, show me one economy that prospered without increasing demand for energy, or a country that has reduced its power consumption by a large portion without shrinking its economy and I will change my mind.

I don't think that such policy will ever be a reality because what will you do with those vehicles that are used for transport, and what about the ones that are mainly used for industrial purposes? There are many measures to stop the pollution of the environment, but the humans won't follow any rules when they are earning profits and enjoying their life by driving their own vehicles.

The Bitcoin mining contributes very less pollution to the environment and yet it's impact is very high because with that little amount of emission the miners are generating a currency that's very useable and could help many people to get employed in future. It's a savior to the ones who want to be free from the restrictions of the governments and they want to spend their money according to their own will.

I know that pollution should be controlled because if it reaches high levels than our planet can face some bad events, but the environmental scientists should find a proper way to fix that problem rather than putting the whole blame on the miners. The best measures to protect the environment is to replace all the vehicles that operate on fossil fuels to the ones that should run with rechargeable batteries.

That way the emissions will be less and within few years the environment will be safe from the air pollution problem. But, there isn't a single solution for the problem because the population of the world is increasing, and they also contribute to the environmental pollution. It's better for the scientists to find an alternative way where those useless gasses should be utilized for other purposes rather than polluting the environment.

I know that thing isn't an easy thing to do, but with many trials the project can be done successfully and the environment of the planet earth can be safe from any kind of pollutions. I think there should be some kind of devices that could capture the CO2 emissions and other greenhouse gases, and then convert them back into biofuels. I believe such thing can be a reality in future, but the scientists should definitely work on that.

Cars with gasoline and diesel engines do pollute the environment. Automakers won't suffer a loss if they change the engine in a car, but how will they deal with the pollution that comes from the production of these cars?
New policy : 1 family 1 car.

We did that during covid for a while, how did it turned out?

No matter how much you would want to protect the coin and mining at one point you have to look at it objectively with raw numbers, and when comparing what tiny amount of energy Bitcoin consume you need to look how many billions are dependent on the industries that are mention with double digits.

Should we really compared 3 billions cars that drive billions to work each day,  thousands of hospitals that save millions each year to, hmm, what was called by the censorship gang  last few days in the other topic , a cloud solution that is now only used to store 8x8 pixels?

If we compare it lets compare it with stuff that have the same impact cause you know it all too well, if BTC shoots by $300k before the halving you will need to be really careful about what to compare when it comes to burned Gwh.


No one? You mean no one will talk more than a billion times per day cause this is all I hear lately.

All related news, in my opinion, is an attempt by legislators to obtain some subsidies from company owners to help in the electoral process, reducing fees or even imposing zero fees is not the only incentive in this industry, but the prices of electricity, cooling, space rent and surrounding conditions, with obtaining low loans Cost and long repayment terms.

A company will not risk taking a loan with high interest in order to establish a mining farm because taxes are low or it will have low electricity. The industry is based on short and medium-term profit. Whenever possible, miners will move mining tools to that area.

Green electricity is a media lobby, no one will talk about Big Oil and how they affect the environment because they fund these companies.

Arkansas State House
Montana Senate
Texas
.....

You know how you can actually protect the environment? Minimize the emissions of vehicles, buildings, factories, etc.

A blanket bill banning the use of vehicles, buildings, factories and stuff like that will not work, it will either just make people angry or it will cause them to run away fro the jurisdiction. It is the same thing that the EU discovered when it pushed its "Ban gasoline-powered cars by 2035" and it got a lot of backlash from auto companies and consumers.

The same way a tax on alcohol in Canada  will produce a drought in Egypt!
The whole ecosystem has evolved and new players have entered, most of the largest companies don't care about anything else than profits and their shareholders, they will say whatever it takes to protect their business and avoid taxation even if they know they are wrong.
Tesla or Enron, Mara or Bitmain no difference.


The hashrate distribution and Foundry share might prove otherwise.
Second, it doesn't matter how much incentive other countries have, they need the capacity and there are few in the world with enough to spare, and short of Canada and Russia I don't see anyone able to get a huge chunk of what the US has.


One of the reasons the whole Salvador mining dream is still a dream two years later.

Miners are profit driven. If the cost of power + 30% is still less then the base cost of power in some location then it is in another location then all other things being equal (labor, rent, internet costs, insurance, etc.) then miner will mine there.

Upstate NY is a prime example. Labor is expensive, but hydro power is cheap, rent is cheap, insurance is average. So even without other intensives a lot of miners moved there.

There have been a few posts about Mississippi & Missouri passing bills to help protect miners. But, we are not hearing about miners moving to those locations since the cost of power is only OK at best.

There are some remote locations with just about free geothermal power. But there is no good multi-homed reliable high speed internet and good luck getting people to work in the middle of nowhere.

-Dave

I am not really sure how taxation will reduce the green energy production because most of the countries do not levy heavy tolls / sometime zero taxes on the green energy products. Not sure what is the structure in the USA but that has got to be free one. Apart from this, miner and electricity is one of greatest relationship one see because nothing works without that.

USA electricity cost is already skyrocketed and with the time it is going to be more than that per unit consumed. The reason is short fall of electricity production due to high consumptions in the countries like California, New York which are main hub of all.

Anyways, Miners are not giving much preference to the US. There are number of nations which are already providing green energy with no taxes, fresh environment and much more. So there it is, more ways to do it.

What is the tax on mining? 
Thiel hinted that due to the plans of the presidential administration, a massive outflow of miners from the country could begin. At the same time, the main goal of the tax plan will not be fulfilled, the expert believes. Here is his corresponding remark on this subject, which is given by The Block.

In fact, this will lead to a decrease in the amount of “green electricity” produced. Today, the construction of a solar or wind power plant takes a very long time, because the queue for connection is two years. And Bitcoin miners provide an economic incentive for people in the energy industry.

That is, the expert believes that such a tax rate will not only not protect the environment, but will also worsen the situation with it. Yet in the United States, renewable energy sources among miners are in demand. Well, the possible relocation of the owners of ASIC miners to other countries and regions can change what is happening for the worse.