US proposes 30% tax for Bitcoin miners

In a note published this Tuesday (2), the White House proposed a 30% tax on the cost of electricity used by miners of Bitcoin and other cryptocurrencies.

According to the text, the rate “encourages companies to reflect on the damage they are doing to society.” For example, mining would be linked to local environmental pollution, increased greenhouse gas emissions and higher energy prices for third parties.

This is not the first White House attack on Bitcoin. In September last year, he even proposed to ban the industry because of electricity consumption.

The White House sees no benefit in Bitcoin mining

Comparing the electricity costs of Bitcoin mining with other activities, the brief White House report points out that consumption in 2022 was comparable to that of all televisions in the country. In total, it is estimated that more than 50 billion kWh has been spent by the industry.

“As shown in the image, the amount of electricity used to mine cryptocurrency in the US in 2022 was comparable to the amount of electricity used to power every home computer or home lighting in the country.”

Cryptocurrency mining, in orange, is one of the largest uses of electricity in the US, sitting right between televisions and personal computers. Source: Casa Branca/Reproduction.

In addition to the costs, the White House justifies that the sector does not generate jobs for the local community and is also a major polluter of the environment. However, he mentions that the activity generates negative effects even when using green energy.

“In the case of hydroelectric power communities where cryptocurrency mining operations are based, increased electricity consumption by cryptominers reduces the amount of clean energy available for other uses, driving up prices and increasing overall reliance on more expensive sources of electricity. Dirt”pointed to the report.

Taxing Bitcoin miners would discourage the industry

As a solution, the White House then proposes a 30% tax on miners’ electricity costs. Also in February, the US had already pressured the industry to disclose its consumption and pollution levels.

“The Digital Asset Mining Energy (DAME) tax encourages companies to think about the damage they are doing to society.”

Since the mining industry is highly competitive and energy costs are one of the main factors determining the success or failure of a business, the 30% tax could lead several companies to leave the US.

Source: Live Coins