The White House is campaigning to tax crypto miners 30% of their energy costs.
An online post made by the White House’s Council of Economic Advisers (CEA) indicates that the Biden Administration is looking to impose a tax for crypto mining operators for the “harms they impose on society.”
In establishing the tax, the administration wants to push for a US tax equal to 30% of a mining firm’s energy costs, and critics are pointing out that the tax is oddly industry-specific, which can potentially threaten the profits and livelihoods of certain businesses.
When enacted, large US mining firms like Riot Platforms (RIOT), Marathon Digital (MARA), Cipher Mining (CIFR), Greenidge Generation (GREE), BitDeer (BTDR) and CleanSpark (CLSK) will be affected.
“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,” writes a description of the CEA’s Digital Asset Mining Energy tax.
In making the case for only taxing crypto mining instead of all energy-intensive industries, the CEA maintains that “crypto mining does not generate the local and national economic benefits typically associated with businesses using similar amounts of electricity.”
The post writes that the tax can raise up to $3.5 billion in revenue over the next 10 years.
The excise tax was first proposed by the Biden Administration in a document published by the US Treasury Department on March 9. The document, called the Greenbook, is a foundation for the administration’s proposals and priorities for generating revenue over the next year. Some proposals fail to survive the process as Congress finalises the country’s spending plans.
In March, the CEA also published a report that details its wider concerns with the industry, including possible pollution and the cost to local communities where mining firms are moving in. According to the post, mining firms that use clean energy may also raise the price of energy and use of resources of the community around them.
Republicans in Congress have been resisting regulator efforts to penalise the crypto mining industry in the US, which may indicate that the Republican-controlled House of Representatives may not be wholly supportive of the new tax.
