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Biden proposes 30% tax on crypto mining
- nullbyte 3y agoSome notable stuff: - Corporate tax rate increases by 7% for all businesses - 30% excise tax on electricity costs associated with crypto mining
- fddrdplktrew 3y agocorporate tax increases will just get passed on to consumers... And mining taxes on power usage is just ridiculous... why don't you add an extra tax on gold used for jewelry too? and luxury cars, yachts, and anything that isn't really useful?
- Retric 3y agoTaxing profits can't directly be passed on to consumers because the point of profit maximization remains unchanged. IE if a restaurant makes more money charging 25$ for a meal than 30$ then increasing prices simply reduces profits. What gets passed on is things that increase costs for the industry like property taxes. If every landlord in the city pays an extra 50$ a month/unit in property taxes you bet rent's going up to compensate.
- fddrdplktrew 3y agoI don't think that's true in the medium term... definitely not in the long term... and maybe not even in the short term.
- ProjectArcturis 3y agoYour airtight logic astounds me.
- fddrdplktrew 3y agothnaks
- Retric 3y agoThink it though. If you could make more money long term while using cheaper ingredients or similar cost saving measure then what's to stop you from doing that without the tax increase?
- kelnos 3y agoDepending on the circumstances, that's a big "if". If your not-so-cheap ingredients are one of your restaurant's selling points (even if not explicitly), using cheaper ingredients could reduce your sales such that the savings turns out to be a wash, or a waste. I think this happens all the time: it's not uncommon to see a restaurant review that goes something like, "I'd been coming here for years, but the quality of food has gone down recently". Granted, you don't know why: maybe they switched to cheaper ingredients, or maybe they got some new cooks that prepare things poorly (or even just differently), etc. But some type of cost-cutting measure could be to blame. And if that person -- and others (and perhaps potential new customers who see the recent bad reviews) -- stops visiting or visits less frequently, those cost-cutting measures may turn out to not have been worth it.
- makeworld 3y agoTrue in theory, but in practice the tax increase can act as a collusion signal for the entire industry to raise prices all at once. Arguably food price inflation has been like this. Clearly the market can withstand it if everyone moves together. All this is not to say that taxes should never be increased of course.
- deleted 3y ago[deleted]
- nickff 3y agoTaxing profits is similar (but not identical) to taxing all investment returns. From the company’s perspective, it reduces the value of domestic corporations to investors (thus advantaging foreign corporations). From the individual’s perspective, it reduces investment incomes (including those funding retirement accounts). In this way, it is passed on. From another point of view, individuals (are supposed to) react to taxes by reducing 'luxury' spending, but businesses don't enjoy luxuries, only their investors do.
- Retric 3y agoTaxing profits would be equivalent to taxing investment returns except foreign inverters don't pay US income taxes. It's therefore advantages for US taxpayers to Tax companies operating in the US.
- kelnos 3y agoWell, it depends: if the restaurant is able to keep the same number of meals per day with a price point of $30, then they still make more at $30 than at $25, even with a higher tax. It's just you can't blanket assume that a particular price point is going to increase or decrease sales until you try it, so...
- Retric 3y agoThe example was presupposing a profit maximizing price. Of course businesses should optimize what they charge, but the incentives exist independent of minor changes to the US tax code.
- ryandrake 3y ago> why don't you add an extra tax on gold used for jewelry too? and luxury cars, yachts, and anything that isn't really useful? These are all really good ideas... Great comment!
- fddrdplktrew 3y agoAlso, they are already taxing crypto transactions. (They are treated like stocks in the USA)
- deleted 3y ago[deleted]
- sidewndr46 3y agoHow about any private jet with a politician on board?
- fddrdplktrew 3y agoor https://mastodon.social/@elonjet https://mastodon.social/@elonjet
- hombre_fatal 3y agoThen how about a luxury that you wouldn’t want to give up like eating meat, which is far more wasteful than eating plants directly? Or any of the other luxuries you take for granted?
- PlunderBunny 3y agoThe slippery slope has meat at the end!
- nickthegreek 3y agoBitcoin and food. Totally comparable. Also, food is under way more regulation than crypto.
- pwg 3y ago> why don't you add an extra tax on ... yachts They tried that, back in November 1991. https://en.wikipedia.org/wiki/Luxury_tax#United_States https://en.wikipedia.org/wiki/Luxury_tax#United_States It covered more than just yachts, but the biggest loser was the yacht industry, which saw sales plummet: [quoting wikipedia]: The federal government estimated that it would raise $9 billion in excess revenues over the following five-year period. However, only two years after its imposition, in August 1993, at the behest of the luxury yacht industry, President Bill Clinton and Congress eliminated the "luxury tax" citing a loss in jobs.[6] Atwood, Liz. "Boat dealers predict sales increase Luxury tax repeal helps ANNE ARUNDEL COUNTY BUSINESS". baltimoresun.com. Retrieved 23 August 2019. [end wikipedia quote] It turns out that luxuries are just that, luxuries, and the rich were more than willing to "do without" yet another yacht (or other luxury good) while the tax was on the books, and the tax never netted the "budget gains" its proponents predicted it would net, due to sales of all the taxed goods dropping off precipitously.
- ProjectArcturis 3y agoIsn't it still a win for the economy if the production that would have been wasted on yachts is instead invested to further increase productivity?
- i_like_waiting 3y agoHow is building yachts for people who demand it more wasteful than producing perfumes, collectibles or nicer lamps? Who gets to decide what is waste as long as there is demand?
- ryandrake 3y agoIn a democracy, ultimately the public should get to decide. Even if "taxing yachts" is not a win for the economy it might be a win for society. The USA is way too timid when it comes to using the tax code to incentivize and shape companies' and people's behavior. We really need to "re-internalize" the costs that big business and the rich externalize onto the public, and one way to do this is to impose very narrowly-directed taxes at things that the public bears but doesn't benefit from.
- pfannkuchen 3y agoThe “luxury car” label gets applied to anything that isn’t aggressively cost cut IMO. True excessive luxury cars do exist, but the label is basically meaningless at this point.
- ripjaygn 3y ago> corporate tax increases will just get passed on to consumers... Like how the corporate tax decreases in 2018 got passed on to consumers...right? Don't we all remember the big deflation in the past 6 years? And all that money was totally not used for stock buybacks and what not, right?
- whalesalad 3y agotrying to wrap my head around how this would be enforced. what if 51% of your server duties are handling API requests for your SAAS or some bullshit product, and 49% is crypto? is your electric bill crypto related or is that just something you do with idle power? or you start a company that builds battery storage to accumulate energy off-peak for some admirable "green purposes" - meanwhile another company (that you own) is a customer of this and uses power from that storage facility "free of charge" since it is a humble research project. so many ways to loophole this. power is power, if you are paying for it you should be able to use it how you please. considering marijuana is federally illegal, shouldn't power for grow operations be treated the same way? it's a slippery slope. if they want to disincentivize crypto they need to do something about the tragic state of the us dollar.
- 8note 3y agoIf I was the tax man, I'd tell you to stop trying to evade taxes by mixing your traffic together, and charge you on the whole lot
- appletrotter 3y agoDiesel is diesel, if you're paying for it you should be able to use it as you please... (don't look up what red diesel is if you don't want your bubble popped)
- whalesalad 3y agoThe red diesel argument fuels mine. We need to move away from taxing fuel to generate road revenue and do that in a use tax especially now that EV’s are taking over. This is a current debate right now.
- dboreham 3y agoDefinitely charge an extra tax if you're using Ruby...
- singhrac 3y agoYou're treating the law like a set of programmable rules, where in fact it is not. If you operate a "partial" crypto operation like you said, the IRS will ask you to open your books and show them how you account for your power usage. I see this time and time again, but public officials aren't idiots. The IRS aren't idiots. Broad, non-specific laws are enforceable. Eventually the burden will be on you to prove you're not doing anything illegal. Fun fact: the vast majority of people who would make arguments like this are hiding an illegal crypto operation.
- dboreham 3y ago> 30% excise tax on electricity costs associated with crypto mining Curious how you measure that electrons are flowing towards silicon calculating hash functions but only hash functions where the output is not used 99.99% of the time but once in a while goes into a bitcoin block.
- throwaway345353 3y agoI imagine it's like how weed grow houses don't have snow on the roof in winter, it's kind of hard to hide a MW scale bitcoin mining operation.
- Havoc 3y agoGood luck enforcing that
- htatche 3y agoIt needs to be banned. The environment is orders of magnitude more important than the dollar.
- johndevor 3y agoDo you rail against fiat as well?
- audunw 3y agoFiat as opposed to crypto currency? Crypto is the most fiat currency imaginable. I know crypto bros tries to redefine reality to trick people into thinking crypto is somehow tied to real tangible value, but it’s just not. Non-fiat currency is physically tied to the creation of real-world value, like say mining gold which has thousands of real-world applications. Traditional fiat currencies are fundamentally designed to be a proxy for real world value. In a well designed system it’s most of its creation is tied to debt issues to, say a gold mine or an oil well or solar farm. Cryptocurrency is - in its utter insanity - fundamentally tied to the destruction of physical value. That is, burning electricity while creating nothing useful. So: more fiat than fiat. Another huge step removed from the creation of real physical valuables. Traditional currencies are far more efficient and a basic necessity for the economy to function at all. Cryptocurrency is fundamentally unsuited to become a real currency by its very design. Every one I’ve seen so far has been made by people who seem to lack even the most basic understanding of what the main origin of currency is. (Hint: it’s not metal coins..)
- johndevor 3y ago> Traditional fiat currencies are fundamentally designed to be a proxy for real world value. The US went off the gold standard in 1971. It's all just bullshit paper now. I'm not sure why you're talking about something that doesn't even exist today. I'd love it if "traditional fiat" currencies existed as you describe, but they don't.
- rcxdude 3y ago
- ProjectArcturis 3y agoThis will push it offshore, which is still a win for US consumers.
- tazu 3y agoA win for Proof-of-Stake?
- perihelions 3y agoIt's absurd to tax something that can so easily migrate to a different country. Of course, crypto mining is absolute wasteful crap. But this tax doesn't decrease the global crypto mining rate: all it does it shift the mining to a different country. And: unlike a lot of industries and heavy manufacturing, the local impact of a crypto mine is very one-sidedly positive—large amounts of cash injecting into the surrounding economy, particularly the energy sector and everyone who works in or profits from it. I do agree that (this type of) crypto mining is a sad waste of resources, and globally suboptimal for the world economy. But there's more to rationality and to morality than making performative gestures against bad things.
- toomuchtodo 3y agoIn many cases, US jurisdiction does not end at its borders, and they can’t outlaw crypto entirely (yet). You get done what you can get done, even if it pushes the externality to a country without the appetite to tackle it. That’s their power grid’s problem.
- ikiris 3y agoThey can shoulder the power grid for it then. Still a win.
- ProjectArcturis 3y agoCrypto mining injects virtually zero dollars into the local community. If this passes, and miners move to, say, Mexico, what benefit does that grant Mexico? They'll have higher local electric costs. The bitcoins will be sold internationally and the owners will keep the money wherever they live.
- perihelions 3y agoBuying electricity (wasteful as this use is) is an injection of cash into the local economy.
- seanmcdirmid 3y agoMuch of the developing world operate their grids at a loss (so basically subsidized). Parts of China had to ban bitcoin mining because miners were using a lot of underpriced electricity to mine bitcoin to noticeable effect.
- KerrAvon 3y agonote: taxfoundation.org doesn’t seem to be nonpartisan
- kristianp 3y agoActual title: President Biden Outlines Vision for Higher, More Complicated Taxes in State of the Union Address and FY 2025 Budget Edit: The hacker news guidelines say don't editorialise the title. "Otherwise please use the original title, unless it is misleading or linkbait; don't editorialize.". https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- dpc_01234 3y agoMining is actually good for stabilizing grid, which is very important for accommodating renewables. Yes, mining is "wasting" electricity, but it's not a full picture. Sometimes being able to "waste" electricity is actually very useful. Mining is a immediately reactive and flexible load on the grid, and in a free market , at the near-perfect competition, mining naturally gravitates to places where electricity is abundant and can benefit from doing something productive (burning off methane, capture over-production). People who wish to ban or "harm" mining have no idea what they are talking about. Electricity is not something that can sit in a basement and wait to be used indefinitely if someone doesn't just "waste" it. That's just not how things work. From the perspective of cryptocurrency users banning also completely doesn't matter. If you ban mining in place X, then too bad for the miners in X, mining will just move to a different location, where possibly electricity might be less clean (not from renewables), and on the global scale things just get worse.
- novia 3y agoWe can use the excess production to do other things, like desalinate water.
- yrral 3y agoThat is very location dependent as you need to transport water to where it's needed. Mining can happen almost anywhere.
- dpc_01234 3y agoAnd there needs to be someone willing to pay for the water more than the electricity used, transport and capital and operational cost. And such price needs to be lower than alternatives. No one is going to build such an infrastructure for charity, or overpay for water "because it helps balance the grid". The thing with miners is also that they are highly portable. The moment it's banned, heavily taxed or simply better uses for electricity out-competed it, they will pack them on shipping containers and off they go, so capital risk is lower. The fact that cryptocurrency users are willing to subsidize production and deployment of such a flexible and portable load balancers is an opportunity, irrespective what one thinks of cryptocurrencies, but most minds are too narrow to go over "uses electricity == bad" narrative.
- jedberg 3y agoWhat a funny way to say "carbon tax". Why not just go all out and propose a carbon tax and credit system? I guess that's too complicated for the electorate to understand?
- lend000 3y agoNot sure why you're being downvoted, but a carbon tax is a little too elegant to expect from a modern politician. This is far messier and more arbitrary. And just one of numerous proposed changes (the linked page is only tangentially about crypto mining).
- paulmd 3y agoCarbon taxes were a pretty popular topic of discussion until the democrats lost congress in 2010. It’s just another thing that’s fallen by the wayside while our democracy struggles at the lower levels of the pyramid of self-actualization.
- woodruffw 3y ago> Raising the corporate tax rate from the current 21 percent to 28 percent, combined with the average state-level corporate tax rate, would give the U.S. the second-highest combined corporate tax rate in the OECD, significantly worsening the competitive position of U.S. businesses and reducing prospects for business investment and workers. This is pretty misleading: the US's effective corporate tax rate is significantly below the OECD average[1], and has been so for a while. The Tax Foundation could lay the blame for this on tax complexity, but curiously only seems to blame tax complexity when taxes go up for businesses, not down. [1]: https://stats.oecd.org/index.aspx?DataSetCode=CTS_ETR https://stats.oecd.org/index.aspx?DataSetCode=CTS_ETR
- nullbyte 3y agoThose are the current stats. If the corporate tax rate is raised to 28%, as Biden is proposing, the US would be far above the average.
- woodruffw 3y agoIf I'm reading this list correctly, an effective 28% corporate tax rate would put us in the middle of the OECD pack. But even then: raising the statutory rate to 28% does not actually guarantee that the effective rate rises to 28%. Edit: By the Tax Foundation's own calculations, the OECD average effective rate is around 26% when adjusted by GDP[1]. So 28% is not extraordinarily out of band, especially when we consider that that's statutory and not effective. [1]: https://taxfoundation.org/data/all/global/corporate-tax-rates-by-country-2022/ https://taxfoundation.org/data/all/global/corporate-tax-rate...
- kennu 3y agoThis is not about crypto mining per se, but the electricity used: > Impose a new 30 percent excise tax on electricity costs associated with digital asset mining Seems like an effective incentive to migrate cryptocurrencies from Proof-of-Work to the more eco-friendly Proof-of-Stake. Ethereum already did this two years ago.
- tareqak 3y agoI think crypto-mining could be help with bringing on more electricity from renewable resources online faster and more gracefully in the absence of sufficiently large scale grid batteries. Imagine a solar or wind power plant that currently has sufficiently problematic swings in electricity production. A crypto-mining data center nearby could consume some if not all of this problematic excess electricity production more gracefully than disabling sections of the solar or wind power plant. In this application, crypto-mining would not be the primary reason to have all of this crypto-mining hardware. As the local grid requires more power generation, crypto-mining nodes could be turned offline to offset their electricity use. This thought is just something I had, and there might be problems with it.
- Justin_K 3y agoGot to raise taxes to pay for all the bullshit spending. Why don’t they just tax excess power usage?
- Ylpertnodi 3y ago30%?
- yashg 3y agoJust outright ban the stupid planet burning ponzi. If the habitual gamblers want to gamble with make believe internet tokens, let them do it with tokens that don't waste a country full of energy. I am sure they can cook up some story to keep the crowd engaged.
- Ajedi32 3y agoThe thing people who are against crypto mining miss is that the cryptocurrency industry is economically self sustaining. Electricity burned on mining crypto is not wasted, it is used to maintain a system that is objectively more economically valuable than the electricity itself is. Trying to regulate what people are allowed to spend their money on just because you personally don't agree those things are valuable is a fool's errand. To the extent there are negative externalities associated with electricity use those externalities are not specific to crypto, therefore singling out crypto for attack just because it uses electricity is unfair and harmful to the broader economy.