Senator Cynthia Lummis (R-WY) said the Biden administration’s to impose a 30% tax on Bitcoin miners is a “dangerous scheme” and an “attack on innovation.”
She argued that such a high tax rate would stifle innovation and push mining operations overseas, undermining both economic and national security interests.
She made the statement in a July 23 social media post, announcing she had published an “orange paper” to refute Biden’s “disastrous proposal.” The paper — 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.
Lummis has been a long-standing advocate of crypto and has also raised concerns over the Biden administration’s actions toward DeFi protocols and non-custodial wallets. She has played a key role in pushing for legislation related to crypto.
Economic impact
Lummis’ paper highlighted the significant economic benefits of Bitcoin mining, particularly in rural and economically distressed areas, where they can create high-paying jobs and stimulate local economies.
The paper cited successful mining operations in Texas, North Dakota, and Kentucky, demonstrating how these projects have revitalized local communities.
The paper also addressed environmental concerns, advocating for the use of renewable energy sources in Bitcoin mining. Lummis argued that with proper regulations and incentives, Bitcoin mining can transition to more sustainable energy practices.
The paper outlined strategies to minimize the environmental footprint of mining activities, including using 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 operations.
Regulatory and national security considerations
A significant portion of the orange paper 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 fosters the growth of the Bitcoin mining industry without compromising environmental and financial stability. The paper suggested tax incentives for companies that use 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 enhance America’s position in the global digital economy.
The paper emphasized the strategic importance of maintaining a robust and secure Bitcoin mining infrastructure within 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 a constructive dialogue about the future of Bitcoin mining to ensure the industry can continue to grow and innovate at a sustainable pace.