The White House is pushing to tax cryptocurrency miners to “pay their fair share” for the costs to local communities and the environment.
The electricity used in cryptomining was similar to that used to power all the country’s home computers or light residential buildings, the White House Council of Economic Advisers said in a blog post published in Tuesday .
According to a chart in the post, there was more use of crypto-mining in US homes than computers, washing machines and dishwashers.
The Biden administration has proposed a so-called Digital Asset Mining Energy, or DAME, excise tax in its fiscal year 2024 budget in march .
Under the proposal, firms would face a 30 percent tax on the cost of electricity used.
According to previous reportsthe tax will be introduced next year and phased in over three years at a rate of 10 percent per year, before reaching a target rate of 30 percent by the end of 2026.
“Currently, cryptocurrency mining firms do not have to pay for the full cost they impose on others in terms of local environmental pollution, higher energy prices and the impact of increased greenhouse gas emissions on the climate,” the council said on Tuesday. “The DAME tax encourages firms to start taking better account of the harm they cause to society.”
The council said pollution from power generation falls disproportionately on low-income areas and communities of color.
The Council of Economic Advisers is an institution under the Executive Office of the President and is responsible for advising the President on economic issues.
“Cryptominers’ intense and often erratic power consumption can also raise electricity prices for consumers and can increase risks to local power grids — stressing equipment, causing service interruptions and security threats,” the board said.
President Biden has been vocal about fighting the climate crisis, planning reduce US greenhouse gas emissions by 50 to 52 percent below 2005 levels in 2030 and achieve zero emissions by 2050.
Congress would have to propose the tax because it has the sole power to enact legislation.
That’s unlikely, given that Republicans control the House of Representatives.
Many Republican lawmakers have been leery of tighter restrictions on cryptocurrency, while encouraging innovation in the sector.
Condemnation on Twitter
Some, including former White House communications director Anthony Scaramucci, criticized the tax Wednesday morning on Twitter.
Brian Quintenz, a former member of the US Commodity Futures Trading Commission, spoke out against the administration’s views on electricity use.
“So it probably doesn’t matter where the electricity comes from – coal, gas, 100% renewable energy, etc. If the government doesn’t like how you USE energy, you will be fined,” Quintenz said.
Quintens was a Republican commissioner at the CFTC and is now the head of policy at crypto venture firm Andreessen Horowitz, also known as a16z.