- CEA proposes new 30% charge on company’s electricity bills
- It should “override” the consequences of mining, economic and environmental
- It is expected that the tax will bring to the treasury up to $3.5 billion over 10 years
Yesterday, May 2, the White House Council of Economic Advisers (CEA) issued a statement to tighten mining taxation. The new levy will aim to address the effects of the “damage” the industry is causing.
“The Energy Excise Tax for Digital Asset Mining (DAME) exemplifies the president’s commitment to addressing both long-standing national challenges and emerging risks—in this case, the costs, economic and environmental, associated with the increased practice of mining cryptoassets.” says in circulation.
In fact, the tax is intended to “balance” the effect of mining in the form of an impact on tariffs, environmental pollution, etc. The fee will be 30% of the operator’s total electricity costs.
So, for example, based on our previous material on the cost of mining BTC in the US, the operating costs of farmers will increase, for example, from $20,000 to $26,000. And that’s just with the introduction of a single new tax.
The initiative threatens not just with a blow to the industry. It risks making the entire segment unprofitable by cutting margins to a critically low level.
At the same time, CEA claims that mining does not bring “tangible benefits” at the local and federal levels. And the negative consequences from the industry are more than tangible.
As expected, the collection will bring to the treasury up to $3.5 billion over the next 10 years. But the chances that the tax will be passed in the shortest possible time, at least in the original format, are rather low. Republicans in Congress actively support the industry, and it is likely that they will be against such a noose around the neck of miners.