The community criticized a blog on 2nd May by the Council of Economic Advisors (CEA). The current president’s administration is committed to reducing the cryptocurrency’s supposed effect on climate change by renewing its push for a 30 percent Digital Asset Mining Energy (DAME) tax on cryptocurrency miners.
Biden’s Administration Set to Impose Punitive Tax
This tax was initially announced on 9th March as part of Biden’s budget for the financial year 2024 and aims to enforce an excise tax on the electricity that crypto miners utilize.
A statement by the Department of Treasury showed that the excise tax was necessary since it would minimize digital asset miners’ activities and their negative impacts and harms on the environment.
The Biden administration’s motive for imposing the tax is to punish crypto miners for their negative impact. The justification for the punitive tax is an effort to safeguard the environment.
Taxing Crypto Mining Unpopular Among Bitcoin Holders
Despite the explanation, news of the punitive tax proposals triggered a downtrend for Bitcoin (BTC). As such, BTC fell momentarily to exchange hands below $20000.
A statement by CEA on 2nd May has revived the proposal with justifications concerning the need to implement the new tax. According to the agency, crypto mining organizations are not obligated to pay the total cost enacted on others in various forms, including increased energy prices, local environmental pollution, and the effects of high greenhouse gas production on the climate.
Also read:As such, there is a need to encourage organizations to start being accountable for the dangers they have to society. Despite crypto assets being virtual, the energy use linked to their intensive production is quite actual and also involves actual costs.
White House Officials Outline Negative Impact Attributed to Crypto Mining
This blog also indicated reports showing that crypto mining possesses some negative impact. Examples include negative spillovers that impact the quality of life, the environment, and electricity grids.
Additionally, electricity generation pollution significantly affects communities of color and low-income places. The blog also shows that using current clean power, for instance, hydropower, for crypto mining may still negatively affect the environment. For instance, it can compel other electricity users to embrace ‘dirtier’ sources instead of clean ones.
The Council of Economic Advisers’ Twitter threat has been heavily criticized by society. For instance, some consider it publicity and misinformation. In addition, a tweet claimed that imposing a tax of that nature would likely push the mining of Bitcoin to Russia as well as other nations.
The White House explained that the firms would incur the particular cost of the burden they impose on other parties. The proposal seeks to sensitize and trigger consciousness among the mining firms to exercise accountability for the harms inflicted on society.
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