President Biden has suggested a new tax on the power used for bitcoin mining in his most recent budget proposal for Fiscal Year 2024. A tax of 30% will be phased in over three years if the budget is passed into law. The plan tries to allay the mounting worry over how mining cryptocurrencies is affecting the ecosystem.
The proposed legislation calls for crypto-mining firms to be held accountable for the environmental pollution and high energy prices they have caused, and to bear full responsibility for the cost they have inflicted on other parties.
According to Benjamin A. Jones, a University of New Mexico associate professor of economics, the rise in cryptocurrency mining is having a concerning impact on the environment. He said in an interview with the UNM media that the procedure mainly relies on energy sources like coal and natural gas, causing considerable air pollution and carbon emissions that endanger our environment and health on a worldwide scale.
The White House’s CEA (Council of Economic Advisers) wrote,“Currently, crypto-mining 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. The DAME tax encourages firms to start taking better account of the harms they impose on society.”
With the DAME tax plan, which intends to address crypto mining’s “negative spillovers on the environment” and pollution that “falls disproportionately on low-income neighborhoods and communities of color,” the White House is now attempting to fight back against its consequences. The rise in taxes, which would prevent cryptocurrency mining companies from just moving to another location to avoid paying more, is projected to generate $3.5 billion in revenue over the course of ten years.
