White House Proposes Punitive Tax on Cryptocurrency Mining

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The Biden government wants to introduce a new tax that was suggested in a budget proposal. They want people who create cryptocurrency to pay 30% of the money they spend on energy.

The White House’s Council of Economic Advisers (CEA) stated in an online post on Tuesday that U.S. President Joe Biden wants to introduce a tax on cryptocurrency mining. The tax would be aimed at punishing these operations for the negative effects they have on society.

The White House’s blog post argued that mining companies that create cryptocurrencies should pay a tax that is equal to 30% of their energy costs. This would be a unique tax that only applies to this industry, and it could reduce the amount of money these companies make.

The Digital Asset Mining Energy tax, proposed by the CEA, would require crypto mining companies to pay for the entire cost they impose on society. This includes the environmental pollution caused by their operations, the higher energy prices they create, and the negative impact of their increased greenhouse gas emissions on the climate. Currently, these companies do not have to pay for these costs.

The CEA argues that while other industries that use a lot of energy wouldn’t have to pay this new tax, crypto mining does not provide the same economic benefits to local and national communities as these other businesses.

The Biden government initially suggested the Digital Asset Mining Energy tax in a Treasury Department document published on March 9, 2023. However, such proposals are frequently altered or disregarded during the process of Congress approving the country’s spending plans.

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According to the White House’s Council of Economic Advisers, the proposed tax on crypto mining could generate as much as $3.5 billion in revenue during the next decade.

The United States has many large companies that are involved in mining cryptocurrencies. Some examples include Riot Platforms, Marathon Digital, Cipher Mining, Greenidge Generation, BitDeer, and CleanSpark.

In March, the White House’s Council of Economic Advisers published a report expressing concerns about the crypto mining industry. The report mentioned the potential economic impact of mining, including pollution and the costs to local communities when mining companies move in. The post also mentioned that even mining firms that use clean energy could increase the overall energy costs and usage of the community surrounding them.

The party in control of the House of Representatives, which is currently the Republicans, has opposed attempts from regulators and the Biden administration to impose penalties on the crypto sector. As a result, they may not be willing to support taxes that harm the industry.