The president’s new budget proposal for fiscal year 2024 includes a digital asset mining energy (DAME) excise tax, which requires bitcoin mining companies to pay 30% of the cost of electricity used to mine crypto assets. This tax aims to address what the White House claims are the economic and environmental costs of mining, citing local pollution, increased greenhouse gas emissions and higher energy prices.
Unfortunately, the proposal does not take into account the large mix of renewable energy sources used to power bitcoin mining Bitcoin Mining Council research Offerings continue to grow, making up more than half of the energy used by miners. Additionally, it does not take into account the network strengthening benefits that bitcoin mining can offer, which it was Visible In states like Texas.
The recent announcement of the DAME tax is another example of government overreach and interference in the private sector. The proposal is just another tax grab by the government, disguised as an attempt to address environmental concerns.
While it is true that mining takes energy, it is not the government’s responsibility to dictate how businesses operate or what is a good and bad use of energy. The government should not penalize companies for their pursuit of innovation and technological advancement. The DAME tax is nothing more than a blatant attempt to stifle innovation in the Bitcoin industry and limit the potential for economic growth.
Furthermore, the government’s claim that bitcoin mining imposes costs on others is unfounded. Bitcoin mining companies actually pay for the electricity they use, and any negative externalities are mitigated by the fact that they are often located in areas with excess or renewable energy. The argument that mining companies impose costs on lower-income neighborhoods and communities is simply fear-mongering and lacks any empirical evidence.
In fact, the DAME tax could have negative consequences for these same communities. The tax could cause companies to move operations offshore, resulting in job losses and reduced economic activity in the United States. Moreover, the tax could create risks for local electrical grids that now benefit from increased production and the ability to immediately shut down miners.
It is clear that the government is targeting the mining industry as it is a new and innovative technology that is disrupting traditional financial systems.
The DAME tax is a misguided attempt by the government to stifle innovation in the bitcoin industry and generate revenue under the guise of protecting the environment. The tax is hypocritical, lacks any empirical evidence and can have unintended negative consequences for communities and consumers. The government should focus on creating a regulatory environment that supports innovation and economic growth, rather than arbitrarily taxing companies.