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The White House is working to convince Congress to approve a 30% climate change tax on cryptocurrency miners as part of its upcoming federal budget.
This initiative, known as the Digital Asset Mining Energy (DAME) excise tax, aims to motivate mining companies to better consider their so-called ‘societal harms’, which include elevated energy costs and greenhouse gas emissions.
Taxing Bitcoin Miners
According to Yahoo News, the president’s Council of Economic Advisors is set to release a blog post on the White House’s website on Tuesday, defending the excise tax as an “illustration of the Administration’s initiatives to combat climate change and lower energy prices.”
“At present, cryptomining companies are not required to cover the full costs they impose on others, in terms of local environmental pollution, increased energy prices, and the effects of heightened greenhouse gas emissions on the climate,” the CEA noted in its post.
The tax is planned to be implemented gradually over three years, beginning at 10% in the first year, increasing to 20% in the second year, and ultimately reaching 30% in the third year. Over a decade, it is projected to yield approximately $3.5 billion in revenue.
An economist from the CEA who spoke with Yahoo mentioned that the economic advantages of crypto mining remain “uncertain,” while apprehensions persist regarding the industry’s financial viability and environmental hazards.
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Critics of the Tax
Bitcoin mining has faced criticism from numerous left-leaning politicians across various developed nations due to its alleged role in climate change through significant energy consumption. In April 2022, a coalition of Democratic lawmakers, including progressives like Alexandria Ocasio Cortez, sent a letter to the Environmental Protection Agency (EPA) urging an investigation into whether mining companies were breaching environmental regulations.
In response, Bitcoin advocates submitted their own letter to the agency the following month, refuting several misconceptions regarding the negative impacts of Bitcoin mining. The community has largely opposed efforts to regulate the mining sector or to alter Bitcoin’s code to eliminate mining from its processes.
Opponents of Biden’s proposed excise tax argue that the fee unfairly targets specific types of energy consumption.
“This draws a distinct line indicating their disapproval of the industry. They are seeking ways to hinder it,” Tom Mapes, director of energy policy at the Chamber of Digital Commerce, told Yahoo News. “This is merely a method to attack an industry they do not endorse.”
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