According to a post made online by the White House’s Council of Economic Advisers (CEA) on Tuesday, U.S. President Joe Biden wants to impose a punitive tax on cryptocurrency mining companies for the “harms they impose on society.”
In its blog post, the government argued in favor of an unprecedented industry-specific fine that might endanger the financial success of mining companies: a 30% U.S. tax on energy expenditures.
According to the CEA’s explanation of the charge known as the Digital Asset Mining Energy tax, crypto mining companies do not currently have to pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the effects of increased greenhouse gas emissions on the climate.
However, the CEA argues that “crypto mining does not generate the local and national economic benefits typically associated with businesses using similar amounts of electricity. Other energy-intensive industries wouldn’t be subject to the new tax in the same way.
In a report released on March 9 by the U.S. Treasury Department, the Biden administration first put up the excise tax idea. The so-called “Greenbook” outlines the administration’s suggestions and goals for raising money over the course of the upcoming year, but these suggestions frequently be abandoned as Congress finalizes the country’s spending plans.
Over the following ten years, the tax could generate up to $3.5 billion in revenue, according to the post.
The biggest mining companies in the United States include Riot Platforms (RIOT), Marathon Digital (MARA), Cypher Mining (CIFR), Greenidge Generation (GREE), BitDeer (BTDR), and CleanSpark (CLSK).
The Council of Economic Advisors of the administration also released a study in March outlining its broader issues with the sector, citing the potential negative economic impacts of mining as one of them. Possible pollution and the cost of attracting mining companies to the area are two of these worries. According to the post, even mining companies that employ renewable energy may increase local residents’ overall energy expenses and consumption.
The Republican-controlled House may not be expected to support taxes that punish the industry because congressional Republicans have opposed attempts by regulators and the administration to penalize the crypto sector.
