A proposed 30% excise tax on cryptocurrency mining firms was the focus of a report released by the White House on Tuesday, in which the administration reiterated its stance that pinching miners’ profits is in the best interest of American communities and the environment.

“Firms do not have to pay for the full cost they impose on others,” the report states, adding that the proposed tax “encourages firms to start taking better account of the harms they impose on society.”

The proposed excise tax would impact digital asset miners beginning in 2024 and require any such firm to pay Uncle Sam a tax that’s based on their associated electricity costs—starting out at 10% and ticking up each year until it reaches 30%. 

The White House’s 2024 budget, which introduced the tax in March, estimates that it could help the government reduce its deficit by $74 million in the first year, potentially growing to $444 million by the fiscal year 2033.

Under the official name of the Digital Asset Mining Energy (DAME) tax, it applies equally to digital asset miners that earn income by validating transactions on proof-of-work networks like Bitcoin and proof-of-stake networks like Ethereum, despite having vastly different levels of energy consumption.

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Author: André Beganski

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