White House Considering Punitive Tax Measures for Crypto Mining Industry
The Council of Economic Advisers (CEA) of the White House has argued in a blog post that U.S. President Joe Biden wants to impose a punitive tax on crypto mining operations due to the negative impact they have on society.
The proposal involves levying a tax equal to 30% of a mining firm’s energy costs. This type of industry-specific penalty could jeopardize the profits of mining businesses.
The CEA argues that currently, crypto mining firms do not pay the full cost of their negative effects, such as local environmental pollution, increased energy prices, and greenhouse gas emissions.
While other energy-intensive industries would not be subject to this tax, the CEA claims that crypto mining does not generate the same level of economic benefits associated with other businesses that use similar amounts of electricity.
The excise tax was first proposed in a Treasury Department document published on March 9 and will need to go through the legislative process to become part of the nation’s spending plans.
According to the White House’s Council of Economic Advisers, the proposed tax on cryptocurrency mining could generate revenue of up to $3.5 billion over the next decade.
Some of the largest mining firms in the United States are Riot Platforms, Marathon Digital, Cipher Mining, Greenidge Generation, BitDeer, and CleanSpark.
The Council of Economic Advisors had previously expressed concerns about the industry in a report published in March.
One of the issues highlighted in the report was the potential economic impact of mining, including pollution and the cost to local communities.
The report stated that even mining firms using clean energy could increase the energy costs and usage of the surrounding community.
Congressional Republicans have been resisting attempts by regulators and the administration to penalize the crypto sector, and it is unclear whether the Republican-controlled House would support taxes aimed at punishing the industry.