- Council of Economic Advisors of the White House claimed that U.S. President Joe Biden wants to impose a punitive tax on cryptocurrency mining companies.
- Cryptocurrency mining has “negative spillovers” on the environment, human well-being, electrical grids, and electricity-related pollutants.
The Council of Economic Advisers (CEA) of the White House claimed in an online statement on Tuesday that U.S. President Joe Biden wants to impose a punitive tax on cryptocurrency mining companies for the “harms they impose on society.”
A 30% U.S. tax on a mining company’s energy costs was proposed in the administration’s blog post. This unusual industry-specific fine could endanger the financial success of such companies. The CEA’s explanation of the charge known as the Digital Asset Mining Energy Tax is as follows:
“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,”
The CEA argues that crypto mining does not produce the local and national economic benefits generally associated with enterprises consuming equal amounts of electricity, even if other energy-intensive industries wouldn’t be similarly burdened by the new levy.
The blog also quoted papers asserting that bitcoin mining has “negative spillovers” on the environment, quality of life, and power networks and that pollution from electricity generation harms low-income neighborhoods and communities of color while increasing consumer electricity costs.
The excise tax was first suggested by the Biden administration in a paper released by the U.S. Treasury Department on March 9. The so-called “Greenbook” outlines the administration’s ideas and goals for raising money during the upcoming year, but these suggestions sometimes fall by the wayside when Congress finalizes the country’s spending plans. According to the post, the tax may generate up to $3.5 billion in income over the following ten years.
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.
Republicans in Congress have opposed attempts by regulators and the administration to penalize the cryptocurrency industry, so it’s possible that the Republican-controlled House won’t support such levies.