Biden Proposes 30% Tax On Crypto Mining• May 3, 2023 3:02 pm • Comments
The most recent White House proposals might have a significant impact on the crypto industry and could affect the current state of the crypto markets.
The Biden Administration is now proposing to pass a 30% tax on the electricity that is used to do crypto mining which essentially makes mining much more expensive.
It seems that the reason that was given is that it will help minimize the crypto industry’s impact on climate change, but some speculate that this is just part of an anti-crypto agenda.
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After all, there are many other ways to reduce climate change, but it seems to be a coincidence that the administration decided call out crypto as the cause of the problem.
This new proposal goes against the stance that some pro-crypto states have when it comes to crypto mining.
The Biden Administration isn’t backing down from its proposal to impose a 30% mining tax on electricity used by crypto miners, arguing in a recent blog about its “real costs” to the environment. https://t.co/CvJZMaIh3j
— Cointelegraph (@Cointelegraph) May 3, 2023
Critics of the proposed tax say the crypto mining industry is being unfairly targeted. “This puts a clear line in the sand that they do not like the industry.
They are looking for ways to hamstring it,” Tom Mapes, director of energy policy at the Chamber of Digital Commerce, told Yahoo News. “This is just a way to go after the industry which they do not support.”
In “proof-of-work” cryptocurrency mining — the most energy-intensive approach to mining, and the one used by bitcoin, by far the largest cryptocurrency — massive supercomputers compete to be the first to solve a mathematical puzzle. This process requires massive amounts of electricity.
According to a White House report from last September, cryptocurrency mining consumes more power than the entire country of Australia. In the U.S., which is home to roughly one-third of crypto mining operations, it accounts for an estimated 0.9% to 1.7% of all the country’s electricity use.
Having a solid crypto mining industry is important for powering a lot of crypto transactions and allowing blockchain systems to work effectively.
Investors also see this new proposal from the White House as a negative risk as it could drive crypto mining operations to overseas.
This would then cause the country to lose a lot of mining resources as companies decide to relocate to other crypto hubs around the world.
Overall, this may cause a temporary retracement in the crypto markets although investors will likely still remain bullish as the industry is now global.
Cryptocurrencies, led by bitcoin, along with other crypto technologies are a major innovation engine. It is a mistake for the U.S. government to hobble the industry and drive innovation elsewhere. Biden’s proposed 30% tax on cryptocurrency mining is a bad idea. 🧵
— Robert F. Kennedy Jr (@RobertKennedyJr) May 3, 2023
The argument that mining firms impose costs on low-income neighborhoods and communities of color is simply fearmongering and lacks any empirical evidence.
It is clear that the government is targeting the mining industry because it is a new and innovative technology that is disrupting traditional financial systems.
The DAME tax is a misguided attempt by the government to stifle innovation in the crypto industry and generate revenue under the guise of environmental protection.
The tax is hypocritical, lacks any empirical evidence and could have negative unintended consequences for communities and consumers. The government should focus on creating a regulatory environment that supports innovation and economic growth, rather than imposing arbitrary taxes on businesses.
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— Lark Davis (@TheCryptoLark) May 2, 2023
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