The White House Council for Economic Activity (CEA) is considering penalizing the crypto mining sector, citing environmental and quality of life repercussions for high energy consumption by crypto miners.
In a major move, the Biden administration is considering imposing a large tax on cryptocurrency mining activities taking place in the United States. On Tuesday, May 2nd, the White House Council on Economic Action (CEA) discussed the harm cryptocurrency mining operations pose to society.
After China banned crypto mining activities in 2021, the United States has seen crypto miners settling in crypto-friendly jurisdictions such as Texas. Currently, the United States is her one of the top destinations contributing to a large share of the world’s crypto mining activity.
The CEA argued for a US tax equal to 30% of energy costs incurred by mining companies. This comes as an unusual industry-specific penalty that could threaten the interests of such businesses. The CEA presents the Digital Asset Mining Energy (DAME) excise case. In a blog post posted on the White House website on Tuesday, the CEA wrote:
“The high energy consumption of cryptominers negatively impacts the environment, quality of life, and power grids these companies are located across the country. Currently, cryptomining companies are contributing to local environmental pollution, rising energy prices, and greenhouse gas emissions. You don’t have to pay all the costs you’re inflicting on others, such as the climate impact of your increased emissions, and the DAME tax encourages companies to start thinking more about the harm they inflict on society. ”
In March 2023, the Biden administration proposed an excise tax announced by the US Treasury Department. This “Green Book” lays out the administration’s proposals and priorities for generating revenue for the coming year. Estimates suggest that the proposal could generate billions of dollars in revenue over the next decade.
Cryptocurrency industry officials oppose measures
Critics of the proposed tax said the crypto mining industry was unfairly targeted. Tom Mapes, director of energy policy at the Electronic Chamber of Commerce, told Yahoo News: Said:
“This draws a clear line that they don’t like this industry. They are looking for ways to hamstring it. I’m sorry.”
Meanwhile, Republicans in Congress have resisted efforts by the administration and regulators to punish the crypto sector. The Republican-controlled House is unlikely to adopt a tax that punishes the industry.
Bhushan is a FinTech enthusiast and has a great knack for understanding financial markets. His interests in economics and finance focus on the emerging blockchain technology and cryptocurrency market. He is in a continuous learning process and keeps himself motivated by sharing what he has learned. In his spare time, he enjoys reading thriller novels and honing his cooking skills.