The Biden administration is actively promoting a tax initially proposed in a recent federal budget, urging that cryptocurrency miners be charged 30% of their energy expenses. President Joe Biden aims to enforce a stringent tax on crypto mining ventures due to the “negative impacts they inflict on society,” according to an argument made by the White House’s Council of Economic Advisers (CEA) in a digital publication on Tuesday.
The administration’s online post presented a compelling case for a U.S. tax amounting to 30% of a mining company’s energy consumption – an unconventional, industry-specific penalty that could potentially jeopardize the profitability of these enterprises.
“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 White House’s Council of Economic Advisers.
Although the proposed tax would not burden other energy-consuming sectors in the same manner, the CEA maintains that “crypto mining fails to produce the customary local and national economic advantages that are generally linked to businesses with comparable electricity usage.”
The Biden administration initially introduced the excise tax in a March 9 U.S. Treasury Department document known as the “Greenbook,” which outlines revenue-generating proposals for the upcoming year. However, such proposals often don’t make it through the congressional approval process. The tax could potentially generate up to $3.5 billion in revenue over a decade.
In March, the administration’s Council of Economic Advisers also released a report expressing broader concerns about the industry, such as potential pollution, costs to local communities, and increased energy consumption, even for mining firms utilizing clean energy sources.
In conclusion, the Biden administration’s push for a 30% energy tax on cryptocurrency mining ventures signals a serious concern about the industry’s social and environmental consequences. As the debate on this unconventional, industry-specific penalty unfolds, it remains to be seen whether the tax will pass through the congressional approval process.