White House Proposes Punitive Tax on Crypto Mining for Environmental Harms

According to a report by CoinDesk, the White House’s Council of Economic Advisers (CEA) has proposed a tax on crypto mining operations, called the Digital Asset Mining Energy tax, in an effort to address the negative impact of mining on society. According to the CEA, crypto mining firms do not pay the full cost of the environmental pollution, higher energy prices, and greenhouse gas emissions they generate, and as such, they should be subject to a specific tax.

The proposed tax would be equal to 30% of a mining firm’s energy costs and could raise up to $3.5 billion over the next decade. However, the tax proposal has faced criticism from the crypto industry and some congressional Republicans who oppose efforts to penalize the sector.

Critics argue that the tax would unfairly target an industry that is already subject to stringent regulations and that it could stifle innovation and investment in the sector. They also question the basis for the tax and suggest that it is not clear how the CEA arrived at the 30% figure for the energy cost tax.

Moreover, some have pointed out that the tax would only apply to U.S.-based mining firms and could put them at a disadvantage compared to their international counterparts. The crypto industry has called for a more nuanced approach to regulating the sector that takes into account its unique characteristics and potential benefits.

The tax proposal comes as the Biden administration seeks to increase revenue to fund its infrastructure plan and tackle climate change. However, it remains to be seen whether the tax proposal will survive the process as Congress finalizes the nation’s spending plans.

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