Biden Administration Proposes 30% Tax on Energy Consumption by Bitcoin Miners

In the Fiscal Year 2024 budget proposal, the President has included the Digital Asset Mining Energy (DAME) excise tax, which would require mining companies to pay a 30% tax on the electricity used for mining Bitcoin or other digital assets. 

The White House aims to tackle claimed economic and environmental consequences of mining by imposing this tax, citing increased greenhouse gas emissions, local pollution, and soaring energy prices.

The proposal fails to acknowledge the significant proportion of renewable energy sources that are currently powering Bitcoin mining, as per the research conducted by the Bitcoin Mining Council (BMC). 

The BMC’s report reveals that renewable energy for Bitcoin mining continues to increase and accounts for more than 50% of miners' energy consumption. Additionally, the White House’s proposal overlooks the potential grid-strengthening advantages that Bitcoin mining can provide.

Numerous Twitter accounts have expressed their concern for such a tax, most notably Robert F. Kennedy Jr.

Last month, Kennedy announced his candidacy for the Democratic nomination for president of the United States and also expressed his interest in Bitcoin. He noted in a Tweet about how the public can use Bitcoin as an “escape route” from the looming financial bubble caused by banks.

He tweeted shortly after the release of the DAME tax proposal that the U.S. government's decision to impede the industry and push innovation away is a misguided approach.

Kennedy acknowledged that while energy usage is a concern, “Bitcoin mining uses about the same as video games and no one is calling for a ban on those.”

He went on to explain that the use of environmental concerns as a pretext to stifle anything that challenges elite power structures is evident. Bitcoin, among others, is an example of this.

Kennedy concluded that “we are seeing today how fragile our over-centralized system is.”