The Biden administration proposes a 30% tax on crypto miners to address climate change.
Miners in the firing line
According to Yahoo News, the Council of Economic Advisers (CEA,) an agency within the U.S. Executive Office of the President, is pushing for a Digital Asset Mining Energy (DAME) tax.
The CEA stated that cryptocurrency miners harm society by contributing to increased local pollution and greenhouse gas emissions while increasing energy costs while operating with impunity.
The agency claimed its proposed DAME tax would redress the harmful environmental and social consequences of crypto mining.
“Cryptominers’ high-energy consumption has negative spillovers on the environment, quality of life, and electricity grids where these firms locate across the country.”
Recently, proof-of-work mining has become a political issue, with advocates pushing back against efforts to stifle mining activities within the U.S.
Last month, the Texas Blockchain Council launched its “Don’t Mess With Texas Innovation” campaign – which sets out to block a bill designed to end incentives for Bitcoin miners in the state.
Similarly, during a recent Senate hearing committee, Senator Cynthia Lummis argued that environmental standards, as set out by the Crypto-Asset Environmental Transparency Act, should not be used to constrain miners.
War on crypto
Commenting on the tax proposal, the CEO of the Satoshi Action Fund, Dennis Porter, called it an unfair and discriminatory action that would suppress the U.S. Bitcoin mining industry.
He added that if enacted, mining companies would respond by leaving American shores, triggering an outflow of innovation and capital to friendlier jurisdictions,
“Imagine if we put a 30% tax on internet companies in the 90’s. It would have ensured all the jobs and economic growth occurred outside the USA.”
WhaleWire took a more extreme position, saying the DAME tax would “completely destroy Bitcoin,” leading to the network collapsing. At the same time, this scenario would see positive price effects, he said.
“If you think we’re cheap now… you’re in for a treat!“
Following China’s Bitcoin mining ban in May 2021, the U.S. became the biggest mining country, accounting for approximately 35% of the total hash rate by January 2022.
More recently, Bitcoin hash rate continued to climb, reaching a new all-time high of 440.7M TH/s on May 1 – suggesting mining confidence.
