Senator Cynthia Lummis has launched a blistering attack on the Biden administration's proposed 30% excise tax on Bitcoin mining energy consumption. According to Lummis, the White House has no idea about how green Bitcoin mining really is. Yes, green, despite all the popular myths.
The pro-crypto lawmaker released a report on July 23 titled "Powering Down Progress: Why A Bitcoin Mining Tax Hurts America".
The report sheds light on the Bitcoin mining industry's benefits to the US energy grid. Lummis argues the tax would harm America's interests. She cites data suggesting Bitcoin mining is cleaner than commonly believed.
"Up to 52.6% of BTC mining might be emissions-free," the report states, referencing the Bitcoin Energy and Emissions Sustainability Tracker. Lummis emphasizes the growing role of mining facilities in grid stabilization.
The GOP senator highlights a key example from Texas. In 2022, Bitcoin miners sold 1500 megawatts back to the grid during peak demand. This pattern repeated in 2024 during winter storm Heather.
Lummis claims the proposed tax would backfire environmentally. "It would disincentivize miners from seeking sustainable energy sources," she argues. The senator gives examples of innovative energy use in mining.
She points to methane sequestration from landfills for Bitcoin mining. Lummis also mentions El Salvador's use of volcanic energy to mine 474 Bitcoin. In Finland, a Marathon Digital facility heats an entire community of 11,000 people.
The report notes Marathon Digital's agreement with Kenya to develop renewable energy. Kenya already sources up to 80% of its energy from renewables. Lummis argues these initiatives could be at risk under the new tax.
The senator invokes the Laffer Curve to warn of potential consequences. She argues higher taxes will drive miners out of the US, reducing tax revenues. Lummis cites China's 2021 mining ban as a cautionary tale.
"Before the ban, Chinese miners controlled a majority of the Bitcoin network's hashrate," the report states. The implication is clear: overtax the industry, and it will simply move elsewhere.
