White House to Impose a 30% Tax on Bitcoin Mining Activities
- Some crypto users believe the DAME tax will stiffen innovation and push Bitcoin miners to other regions.
- Although bitcoin mining consumes electricity, mining companies are presently embracing other eco-friendly energy sources.
- Crypto experts are concerned that the DAME tax is another attempt by the US government to attack the crypto industry.
Reports from the White House have confirmed that the Digital Asset Mining Energy (DAME) excise tax, which proposes that bitcoin mining companies pay 30% of the cost of the electricity needed to mine crypto assets, is part of the President’s proposed budget for Fiscal Year 2024. The White House cites local pollution, an increase in greenhouse gas emissions, and increased energy costs as reasons why this tax is necessary to tackle what it believes are the financial and environmental repercussions of mining.
A statement from the White House’s Council of Economic Advisers (CEA) explained that “currently, crypto mining 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 further claimed that the DAME tax “encourages firms to start taking better account of the harms they impose on society.” The White House first announced plans to introduce a 30% tax on electricity used for mining in March. However, recent statements about the policy are aimed at justifying the measure.
The new release also cited reports claiming that cryptocurrency mining has “negative spillovers” on the quality of life and the environment at large. The blog post claimed that communities of color and low-income neighborhoods are the main victims of pollution from electricity generation.
The CEA’s post received a lot of backlash from the public. Some crypto users claimed implementing such a policy would “simply push Bitcoin mining to Russia and other countries.” Others argued that the proposal ignores the wide range of renewable energy sources that power bitcoin mining, which sources claim accounts for more than half of the energy used by miners. Some others pointed to the grid-strengthening benefit of Bitcoin mining as witnessed in Texas.
Crypto enthusiasts believe the proposal is another case of government intrusion and interference in the crypto sector.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
