The White House’s Council of Economic Advisers (CEA) argued Tuesday in an online post that the U.S. President Joe Biden is considering putting out a punitive tax on crypto mining operations for the “harms they impose on society,” The administration’s blog entry claimed a U.S. tax equal to 30% of a mining firm’s energy costs – an unusual industry-specific penalty that could threaten the profits of such businesses.
According to the CEA’s description of the levy known as the Digital Asset Mining Energy tax, “Currently, crypto mining 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,” While other energy-intensive industries wouldn’t be similarly hampered with the new tax, the CEA contends that “cryptomining does not generate the local and national economic benefits typically associated with businesses using similar amounts of electricity.”
While some of the largest U.S. mining firms include Riot Platforms (RIOT), Marathon Digital (MARA), Cipher Mining (CIFR), Greenidge Generation (GREE), BitDeer (BTDR) and CleanSpark (CLSK),the first proposal of the excise tax by the Biden government by the U.S. Treasury Department on March 9. The presumed “Greenbook” lays out the administration’s proposals and priorities for generating revenue over the next year, but such proposals often fail to survive the process as Congress finalizes the nation’s spending plans. As per the post the tax could raise up to $3.5 billion in revenue over the next 10 years.
In addition, a report published by the administration’s Council of Economic Advisors in March details its wider concerns with the industry and showcased the possible economic effects of mining as one such issue. These concerns include possible pollution and the cost to local communities of having mining firms move in. Even mining firms that use clean energy might raise the overall energy costs and usage of the community around them. It is further anticipated that the Republican-controlled House may not be likely to embrace taxes that punish the industry as the Congressional Republicans have resisted efforts from regulators and the administration to penalize the crypto sector.