In March the Biden Administration released their budget for 2024. Buried on page 156 was a single line item about imposing a Digital Asset Mining Excise Tax (DAME), with projected revenues for federal government going from $74 million in 2024 to $327 million in in 2026. You may be wondering the difference two years makes, well like a room with a slow hydrogen sulfide leak you will smell a rotten poison before the lethal dose hits. The administration plans to start with a 10% tax in 2024, ramp it up another 10% in 2025, and “end” with a 30% tax on digital asset mining in perpetuity.
The stated reasoning behind this policy is to disincentivize electricity use because it has “negative spillovers on the environment, quality of life, and electricity grids“.
Is this really all about the environment, grid safety, and end-consumer electricity costs? One line in the Department of Treasury Press Statement made it abundantly clear this is just a cash grab. I was operating a little more cynically and thinking this was a lobbied ploy by data center operators until I read this line:
Firms that produce or acquire power off-grid, for example by using the output of a particular electricity generating plant, would be subject to an excise tax equal to 30 percent of estimated electricity costs.General Explanations of the Administration’s Revenue Proposals for Fiscal Year 2024 Pg. 71
All the offgrid hydro and solar powered crypto farms will also be getting taxed. Someone tell Voskcoin before he has another life altering setback.
The Administration acknowledges these mining outfits are very mobile state to state. What happens to the projected revenue when these miners realize other countries with robust electrical grids and fair tax policies are happy to have them? I think they’ll stay here and wait for nuclear fusion we’ve only been waiting since the 1950s A.I. should solve it next year …definitely.