White House Introduces Idea Of Taxing Crypto Mining Up To 30%
- The White House recently floated the idea of taxing cryptocurrency mining up to 30%.
- The excessive tax rate was introduced on the grounds that this is an activity that lacks economic benefits.
- Regulators set the maximum tax rate that operators have to bear due to the harm they cause to society, especially the environment.
The White House first floated the idea of an energy tax in March. The cryptocurrency mining sector may be subject to a maximum tax rate of up to 30%.
In a study released by the White House on Tuesday, the administration restated that profits from mining businesses are in the American people’s and the environment’s best interests. The research focused on a proposed 30% excise tax on cryptocurrency miners.
“Currently, crypto mining firms do not have to pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the impacts of greenhouse gas on the climate, taking better account of the harms they impose on society.”
The proposed excise tax would impact digital asset miners starting in 2024 and require any such company to pay Uncle Sam a tax based on the cost of electricity and their relevance – starting at 10% and increasing each year until they reach 30%.
The report estimates that crypto miners in the United States will consume around 50,000-gigawatt hours of electricity by 2022 between Bitcoin and Ethereum, roughly as much as TVs and notably more than home computers.
The tax was included in the White House 2024 budget in March. According to the budget, it might aid in reducing the deficit by $74 million in the first year, which is expected to rise to $444 million by fiscal year 2033.
In addition to presenting environmental issues, the government claims that because of pollution and rising costs of renewable energy, digital asset mining disproportionately affects communities of color. The worth of cryptocurrencies is also evaluated in the paper.
The White House began by dividing a representative sample of Bitcoin and Ethereum operations situated in the United States by global estimates of cryptocurrency mining energy use.
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