As part of his proposed budget for Fiscal Year 2024, the U.S. President has introduced the Digital Asset Mining Energy (DAME) excise tax. Under this new tax, companies engaged in bitcoin mining would be required to pay 30% of their electricity costs associated with mining digital assets as a tax.
The tax is intended to address what the White House has identified as the negative economic and environmental impacts of mining, including “local pollution, higher energy prices, and increased greenhouse gas emissions.”
But the proposal seems to be overlooking the significant proportion of renewable energy sources that are now powering bitcoin mining operations. According to recent research from the Bitcoin Mining Council, these sources contribute to more than half of the energy used by miners and are continuing to grow.
Critics are denouncing the newly announced DAME tax as yet another instance of government overreach and undue interference in the private sector. Some are characterizing the proposal as simply another attempt by the government to grab more tax revenue, disguised as an effort to address environmental issues.
Meanwhile, some associate this action with the government’s anti-bitcoin stance and believe the government does not like the idea of people being in control of their own money.
Although it is undeniable that mining activities do require significant amounts of energy, many argue that it is not the government’s role to dictate how businesses operate or to determine what constitutes an appropriate use of energy.
Critics contend that the government should not be penalizing innovative businesses for seeking technological progress and advancement. In the view of some, the DAME tax represents a clear attempt to impede innovation within the bitcoin mining industry and restrict its potential for economic growth.