The White House is trying to persuade Congress to pass a 30% tax on the electricity used in cryptocurrency mining in the next federal budget in order to minimize the nascent industry's impact on climate change.
State or local regulation might just lead the industry to move elsewhere, the White House says, so it believes that the federal government needs to step in and provide some national regulation that reflects the social cost of crypto mining. The tax would be phased in over three years, starting at 10% next year, then rising to 20% and finally 30%.
“Where we see the strains emerging are in these places that are drawing off the grid, where this starts getting noticed at the level that communities are pushing back and are experiencing consequences of it,” an economist on the CEA who spoke on the condition of anonymity told Yahoo News. “Localities are dealing with it, and they’re struggling to come up with solutions on their own.”
The proposed tax on mining cryptocurrency would generate an estimated $3.5 billion over 10 years. But revenue isn’t the point, according to the CEA, which writes in its forthcoming post that “the primary goal of the DAME tax is to start having crypto miners pay their fair share of the costs imposed on local communities and the environment.”that it would make more sense to tax the greenhouse gas emissions from crypto mining, rather than electricity usage.
The White House counters that any increase in electricity use makes it harder to green the grid because it means that much more clean energy is needed. Of course, there are other energy-intensive industries, such as manufacturing of chemicals and steel, that are not being targeted with a tax on their electricity use. But the White House argues that crypto mining doesn't necessarily generate the same benefits, including creating jobs and supplying essential products, as those other sectors of the economy.
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