The Biden administration is pushing for a 30% Digital Asset Mining Energy (DAME) tax on cryptocurrency miners to minimize the industry’s impact on climate change. The proposal was announced on March 9 as part of President Joe Biden’s FY2024 budget and seeks to impose a phased-in 30% excise tax on electricity used by crypto-miners.
Today the CEA released a blog highlighting a new tax in the President’s budget, the Digital Asset Mining Excise Tax (“DAME Tax”), a tax equal to 30 percent of the cost of the electricity cryptominers use once fully phased in. 1/ https://t.co/944x0wVVB5
— Council of Economic Advisers (@WhiteHouseCEA) May 2, 2023
The Department of Treasury wrote at the time that «an excise tax on electricity usage by digital asset miners could reduce mining activity along with its associated environmental impacts and other harms», causing Bitcoin (BTC) to fall under $20,000 just a day later.
The White House’s Council of Economic Advisers (CEA) issued a statement on May 2, justifying the need for the tax, stating that «cryptomining 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».
#Bitcoin mining is good for the grid and good for the environment, yet Biden wants to tax it 30% and send this valuable industry into the hands of Russia.
— Dennis Porter (@Dennis_Porter_) May 2, 2023
The CEA stated that «the DAME tax encourages firms to start taking better account of the harms they impose on society» and highlighted reports that crypto mining has «negative spillovers» on the environment, quality of life, electricity grids, and that pollution from electricity generation falls on low-income neighborhoods and communities of color while pushing up the cost of electricity for consumers. The blog even suggests that crypto mining using existing clean power (such as hydropower) can still have a negative impact on the environment, by pushing other electricity users to «dirtier» sources of electricity.
The Twitter thread posted by the Council of Economic Advisers has attracted widespread criticism from the community, with some calling it «misinformation» and «propaganda,» while one Twitter user argued that such a tax would «simply push Bitcoin mining to Russia & other countries.»
Related: Biden budget proposes 30% tax on crypto mining electricity usage