The White House is taking strides in the fight against climate change by urging Congress to pass a 30% climate change tax on cryptocurrency miners as part of the next federal budget. Dubbed the Digital Asset Mining Energy (DAME) excise tax, this change aims to hold mining firms accountable for the societal impacts of their operations, such as increased energy costs and greenhouse gas emissions.
The president’s Council of Economic Advisors backs this tax, citing the need to address the externalities caused by crypto mining firms, such as environmental pollution and higher energy prices. The tax is designed to roll out incrementally, with a 10% tax in the first year, increasing by 10% each year until it hits the 30% mark. This could result in an estimated $3.5 billion in revenue over 10 years. However, the council acknowledges that the economic benefits of crypto mining are still unclear and that concerns persist about the industry’s financial stability and environmental risks.
Cryptocurrency mining, especially Bitcoin mining, has drawn the ire of many politicians and environmentalists worldwide due to its high energy consumption and potential contributions to climate change. As recently as April 2022, several Democratic politicians, including Alexandria Ocasio Cortez, requested that the Environmental Protection Agency (EPA) investigate whether mining companies were violating environmental laws.
In response, the Bitcoin community issued a letter to the EPA in May, dispelling numerous misconceptions about the environmental impact of Bitcoin mining. The community remains staunchly against any regulation of the mining industry and has resisted modifying Bitcoin’s code to eliminate mining from its operations.
This proposed excise tax has its detractors, who argue that the government is unjustly targeting specific industries. Tom Mapes, the director of energy policy at the Chamber of Digital Commerce, claims that this tax is an attempt to hamstring an industry that the White House does not support.
While the proposed DAME tax takes aim at cryptocurrency miners in the name of climate change, the debate surrounding its implementation centers on whether the tax is a fair and justified measure or an arbitrary attempt to undermine an industry. As the conversation continues, it remains crucial for interested parties to approach this issue objectively, weighing both the environmental concerns and the potential innovation that cryptocurrency mining promises.