The White House proposes a "Digital Asset Mining Energy Tax," with a proposed 30% tax on mining electricity consumption, estimated to generate an additional $3.5 billion in tax revenue over the next decade.

The "Digital Asset Mining Energy Tax" proposed in the fiscal year 2024 budget is estimated to generate $3.5 billion in tax revenue for the government. The proposal suggests a 30% electricity tax to be levied on mining companies, arguing that this is a responsibility they should bear for climate and environmental impact. Will this reshape the global mining landscape once again?

White House Proposes Digital Asset Mining Energy Excise Tax (DAME)

The White House has introduced a tax proposal in the Fiscal Year 2024 Budget called the "Digital Asset Mining Energy Excise Tax, DAME." The White House Council of Economic Advisers (CEA) stated in a release that this tax would impose a 30% tax on the electricity consumption of cryptocurrency mining enterprises.

It emphasizes that the high energy consumption of the crypto mining industry has negative impacts on the environment, quality of life, and local power grids. These impacts have not been fully borne by crypto mining enterprises in the past, which is the primary reason for the taxation.

Additionally, the proposal is expected to generate $3.5 billion in revenue for the government over the next 10 years.

Purpose of the Digital Asset Mining Energy Tax: Hold Miners Accountable for Social Costs

The White House Council of Economic Advisers stated that mining enterprises currently do not have to be accountable for the costs they impose on society, including local environmental pollution, higher energy prices, and increased greenhouse gas emissions affecting the climate. The energy tax aims to incentivize mining enterprises to better consider the harm they cause to society.

The release also referenced a New York Times article criticized by the crypto community for exaggerating data, which highlighted that the energy consumption of 34 mining facilities is equivalent to that of 3 million households. The image below shows the electricity usage of crypto mining in the U.S., roughly lower than that of television consumption.

Previously, Texas, which was most friendly to crypto mining enterprises, has begun considering the repeal of tax incentives. If the Digital Asset Mining Energy Tax is passed, the global mining landscape is likely to undergo significant changes once again after China's ban.

(U.S. Mining Dynamics: Texas Power Restrictions, Repeal of Mining Enterprise Tax Incentives)