White House Officials Pushing for 30% Crypto Mining Tax, Cites Environmental Concerns
On May 2, the White House Council of Economic Advisers (CEA) issued an official report revealing plans to impose 30% taxes on crypto mining firms in the region. The policymakers initially proposed imposing punitive taxes on crypto miners when reviewing the federal budget (FY2024) on March 9.
In collaboration with other legislators, the CEA demanded the implementation of 30% digital assets mining energy (DAME) due to environmental threats posed by crypto mines in the region.
Effect of Crypto Mining on the Environment
In the latter, the CEA underscored the adverse effects of crypto-mining activities. The CEA argued that the crypto miners exposed the community to environmental pollution due to the emission of greenhouse gases from the mines.
They mentioned that the carbon emission from the mines diminished the quality of life of local communities by increasing the cost of living. In their analysis, the CEA observed that the waste energy from the mines pushed the cost of electricity higher.
Additionally, they noted that energy generated from the hydro plants was insufficient to support other uses. As a result, less supply of clean energy impacted to overreliance on electricity, which hampers ozone layer’s degradation.
The CEA admitted that the amount of electricity utilized by crypto mines failed to yield desirable results necessary to support the community’s prosperity and foster economic growth.
Scope of CEA Proposal
Following this, the CEA opined that the DAME taxes aimed at enabling the miners to be more accountable for the environmental implication they expose to the community.
In an earlier report, President Biden’s administration recommended imposing a 30% excise duty to source extra government revenue. Even though the taxes will reduce the income generated from the crypto mines, the CEA proposal aimed at improving the national economic position.
The March 9 CEA’s proposal was documented in the Greenbook to act as a roadmap towards fulfilling the intended purpose of the Biden administration. The Greenbook has incorporated the CEA’s recommendations and the core revenue-generating projects that the administration should prioritize in 2024.
A scrutiny of implemented projects captured on the Green Book revealed that most of the projects were considered impractical by Congress at the primary formulation of the national budget.
In particular, the U.S. Congressional Republicans have been against regulations that undermine the expansion of crypto firms. Over the past, the Republicans protested over penalties imposed on crypto firms.
Impact of Imposition of Crypto Mining Taxes
According to the CEA proposal, imposing DAME taxes could generate revenue worth $3.5 billion by 2033. The proposed taxes will affect the operation of crucial crypto mines in the U.S., such as Riot Platforms (RIOT), CleanSpark (CLSK), Marathon Digital (MARA), BitDeer (BTDR), and Cipher Mining (CIFR), among others.
Responding to the CEA’s May 2 announcement, the U.S. Department of Treasury stated that imposing the 30% tax on miners will minimize the crypto mining activities in the region.
Besides the Treasury suggestion on the CEA proposal, other pro-crypto Twitter users argued that imposing the DAME regulations would force mines in the region to pursue viable markets in Russia and other areas. Other market critics labeled the CEA proposal as mere propaganda.
Elsewhere, the U.K. regulators plan to amend the existing crypto tax regulations to provide more clarity to taxpayers and crypto holders.
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