Biden Administration Pushes Congress to Pass 30% Tax on Bitcoin Mining
The White House is attempting to persuade Congress to pass a 30% climate change tax on cryptocurrency miners as part of its next federal budget.
The change, titled the Digital Asset Mining Energy (DAME) excise tax, is designed to encourage mining firms to start taking better account of their so-called ‘societal harms’, including higher energy prices and greenhouse gas emissions.
Taxing Bitcoin Miners
As reported by Yahoo News, the president’s Council of Economic Advisors plans to publish a blog post to the White House’s website on Tuesday justifying the excise tax as an “example of the Administration’s efforts to fight climate change and reduce energy prices.”
“Currently, cryptomining firms do not have to pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the impacts of increased greenhouse gas emissions on the climate,” the CEA stated in its post.
The tax would be phased in over 3 years, starting at 10% in the first year before rising to 20% and eventually 30% in the following two years. Over 10 years, it would generate an estimated $3.5 billion in revenue.
A CEA economist who spoke with Yahoo added that the economic benefits of crypto mining remain “unclear,” while concerns still loom about the industry’s financial stability and environmental risks.
Critics of the Tax
Bitcoin mining has become unpopular with many left-wing politicians spanning numerous developed countries due to its suspected contributions to climate change through its vast energy consumption. In April 2022, a group of Democrat politicians including progressives like Alexandria Ocasio Cortez signed a letter to the Environmental Protection Agency (EPA) to investigate whether mining firms were violating environmental statutes.
Bitcoiners responded with their own letter to the agency the following month, debunking numerous misconceptions about the harms of Bitcoin mining. The community has generally been strictly opposed to attempts to regulate the mining industry or to change Bitcoin’s code so as to remove mining from its operations.
Critics of Biden’s proposed excise tax believe the fee arbitrarily targets specific forms of energy consumption.
“This puts a clear line in the sand that they do not like the industry. They are looking for ways to hamstring it,” Tom Mapes, director of energy policy at the Chamber of Digital Commerce, told Yahoo News. “This is just a way to go after the industry which they do not support.”
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Filed under: Bitcoin - @ May 3, 2023 1:00 am