White House advocates for tax on crypto mining to address societal harmsThe White House’s Council of Economic Advisers (CEA) revealed that U.S. President Joe Biden is considering implementing a punitive tax on crypto mining operations due to the negative societal impacts they create.
Digital asset mining energy tax proposal
In an online post, the CEA proposed a U.S. tax equivalent to 30% of a mining company’s energy costs, a unique industry-specific penalty that could jeopardize their profits. The CEA argued that crypto mining firms do not currently account for the full costs they inflict on others, including local environmental pollution, increased energy prices, and the impact of higher greenhouse gas emissions on the climate.
The CEA asserts that crypto mining does not produce the local and national economic benefits typically associated with businesses consuming comparable amounts of electricity, unlike other energy-intensive industries.
Potential revenue and congressional resistance
The Biden administration first introduced the excise tax proposal in a March 9 document published by the U.S. Treasury Department. Although the so-called Greenbook outlines the administration’s revenue-generating proposals and priorities for the coming year, many such proposals fail to make it through the congressional process of finalizing national spending plans.
The proposed tax could generate up to $3.5 billion in revenue over the next decade. Major U.S. mining firms include Riot Platforms, Marathon Digital, Cipher Mining, Greenidge Generation, BitDeer, and CleanSpark.
The CEA also published a report in March detailing broader concerns about the crypto mining industry, including potential pollution, the cost to local communities, and increased overall energy costs and usage. However, Republican-controlled Congress has resisted attempts by regulators and the administration to penalize the crypto sector, making it unlikely that they will support taxes targeting the industry.
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