The US President wants to tax crypto miners and companies more heavily because otherwise they would not generate any benefit for society. The first proposals deal with around 30% taxes.
The government around US President Joe Biden has proposed a new tax that would increase the taxation of cryptocurrency miners. This is a so-called DAME tax. Specifically, it says: “The DAME tax encourages companies to take better account of the harm they cause to society.” The first draft from the White House is called “The DAME Tax: Cryptominers Pay for Costs They Impose on Others.”
In the case of cryptocurrencies, “social benefits are not yet foreseeable”
What is it about exactly? The abbreviation DAME stands for Digital Asset Mining Energy, which in German means “energy for the mining of digital assets.”
This DAME tax aims to force companies to pay a tax equal to 30% of the cost of the electricity they use to mine cryptocurrencies:
The primary objective of the DAME tax, which is expected to raise an estimated $3.5 billion over 10 years, is for the crypto economy to shoulder its fair share of the costs imposed on local communities and the environment.
Ultimately, this would massively reduce the profits of such companies and, in the worst case, even destroy them entirely.
This is unlikely to affect some companies, because some crypto miners have already made themselves self-sufficient from official electricity providers: they have built their own power plant and sell excess electricity
What’s behind the idea? According to various sources, the aim is to avoid extreme price fluctuations. Because if crypto companies need a lot of electricity, the local authority must also supply it. In other areas, however, electricity prices would then rise.
According to the US government, crypto mining is already the fourth largest consumer in the USA:
In addition, the White House states that it questions the social utility of these currencies:
Aside from these well-known costs and risks, cryptomining does not bring the local and national economic benefits typically associated with businesses consuming similar amounts of electricity. Instead, the energy is used to create digital values whose broader societal benefits are yet to be seen.
Also due to the rising electricity prices in the USA, many mining companies are making themselves independent of domestic suppliers and relying on their own energy supply. However, one company has now taken it too far and used an old borehole for their purposes. This made the local residents anything but happy:
Company hides crypto mine in old borehole, driving thousands of innocent people insane