Biden Administration Proposes 30% Tax On Crypto Mining Operations
U.S. President Joe Biden is considering imposing a punitive tax on crypto mining operations due to the “harms they impose on society,” according to a post by the White House’s Council of Economic Advisers (CEA) on Tuesday. The CEA’s blog entry argues that crypto mining companies should be subject to a U.S. tax equal to 30% of their energy costs, a move that could hurt the profits of such businesses.
U.S. President Joe Biden is seeking a 30% punitive tax on crypto mining operations because "they are a danger to society," the White House Council of Economic Advisers (CEA) said on Tuesday. But the Republican-controlled House is unlikely to support the tax that would punish…
— Wu Blockchain (@WuBlockchain) May 3, 2023
Punitive Tax on Crypto Mining Operations
The proposed tax, known as the Digital Asset Mining Energy tax, aims to hold mining firms accountable for the environmental pollution, higher energy prices, and increased greenhouse gas emissions that their operations can cause. While other energy-intensive industries would not face a similar tax, the CEA contends that “cryptomining does not generate the local and national economic benefits typically associated with businesses using similar amounts of electricity.”
The Biden administration first proposed the excise tax in a March 9 document published by the U.S. Treasury Department. The tax could raise up to $3.5 billion in revenue over the next 10 years, the post said.
Opposition to Biden’s Punitive Tax
However, congressional Republicans have resisted efforts from regulators and the administration to penalize the crypto sector, and the Republican-controlled House may not be likely to embrace taxes that punish the industry. The CEA’s wider concerns with the industry 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, the post said.
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).
It remains to be seen whether the proposed tax will survive the legislative process as Congress finalizes the nation’s spending plans. Nevertheless, the proposal signals the Biden administration’s concerns about the environmental impact and economic costs associated with crypto mining.
