{"id":299159,"date":"2024-01-31T11:26:45","date_gmt":"2024-01-31T10:26:45","guid":{"rendered":"https:\/\/climatescience.press\/?p=299159"},"modified":"2024-01-31T11:26:48","modified_gmt":"2024-01-31T10:26:48","slug":"there-aint-nothing-like-a-dame","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=299159","title":{"rendered":"There Ain\u2019t Nothing Like a \u201cDAME\u201d"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From CFACT<\/a><\/p>\n\n\n\n

By Duggan Flanakin<\/a><\/p>\n\n\n\n

The Biden Administration\u2019s proposed fiscal 2024 budget included a new proposal for the Digital Asset Mining Energy (DAME) excise tax with a goal of taking 30 percent of the cost of electricity used in cryptocurrency mining for the federal treasury. While the proposal failed to win support last year, it remains a goal of the Biden Administration.<\/p>\n\n\n\n

But a new report<\/a> from the Competitive Enterprise Institute urges the White House to \u201cDon\u2019t Depower Crypto.\u201d The report concludes that the DAME tax would do more harm than good, stifling innovation and consumer well-being. And, given the rapid pace of change in the fledgling industry, the tax would make almost no real-world sense.<\/p>\n\n\n\n

A Biden press release<\/a> had boasted that the tax would bring in $3.5 billion in revenues over a 10-year period. It would also punish the crypto industry for \u201cthe harms they impose on society\u201d through environmental pollution, higher energy prices, and increased greenhouse gas emissions. To some in Washington, it seems, cryptocurrencies are the new fossil fuels.<\/p>\n\n\n\n

The Biden blurb cites the Economic Report of the President<\/a> to justify the tax on grounds that \u201cthe energy consumption tied to [crypto\u2019s] computationally intensive production is very real and imposes very real costs.\u201d [Crypto is evil, just like carbon, so tax it heavily.]<\/p>\n\n\n\n

The announcement came just weeks after a New York Times<\/em> hit piece<\/a> on the crypto industry\u2019s heavy use of electricity, virtually blaming crypto miners for dozens of deaths from power outages during winter storm Uri while \u201crow upon row of computers were using enough electricity to power about 6,500 homes as they raced to earn Bitcoin.\u201d<\/p>\n\n\n\n

Investigative reporter Gabriel J. X. Dance asserted that the computers were \u201chunting for an elusive combination of numbers that Bitcoin\u2019s algorithm would accept,\u201d using enough electricity to power a small city. Nationwide, said Dance, the amount of electricity used in crypto mining in the U.S. alone during 2022 was similar to the amount used to power all the nation\u2019s home computers or residential lighting.<\/p>\n\n\n\n

Neither Dance nor the White House mentioned, say, the amount of electricity used by the National Security Agency to spy on the American people. But Alphabet<\/a> (Google) used 22.29 terawatt-hours of electricity in 2022, up from 12.7 TWh in 2019, and Meta<\/a> (Facebook) used 11.5 TWh in 2022, up from 5.14 TWh in 2019. Overall, U.S. electricity consumption in 2022 was 4,085 TWh.<\/p>\n\n\n\n

The White House further stated that (as they claim for fossil fuels) \u201ccrypto mining firms do not have to pay for the full cost they impose on others\u201d and that the DAME tax would encourage firms to start taking better account of the harms they impose on society.<\/p>\n\n\n\n

The blame game on crypto continued with the assertion, citing a 2019 American Chemical Society report, that \u201cpollution from electricity generation falls disproportionately on low-income neighborhoods and communities of color.\u201d [Just like fossil fuels<\/a>!]<\/p>\n\n\n\n

Worse, crypto\u2019s \u201clust\u201d for electric energy \u201ccan push up electricity prices for consumers and increase risks for local electrical grids\u201d \u2014 straining equipment, causing service interruptions and safety hazards. That\u2019s according to a report from a public utility district in Washington State.<\/p>\n\n\n\n

[If this is true of electric power generation, then surely an all-electric vehicle fleet would be an even greater threat to \u201clow-income neighborhoods and communities of color.\u201d It would require<\/a> the U.S. to generate 20 to 50 percent more electricity than the 4,085 TWh in 2022 \u2013 a staggering 800 to 2,000 TWh more, dwarfing the 50 TWh claimed for crypto mining today.]<\/p>\n\n\n\n

The White House next makes the astounding claim that crypto mining does not generate local or national economic benefits \u201ctypically associated with businesses using similar amounts of electricity.\u201d Or, rather, that the \u201cbroader social benefits\u201d of digital assets, which might include jobs or economic opportunities, have yet to materialize.<\/p>\n\n\n\n

[Apparently, the White House does not see crypto mining as a \u201cjob\u201d or income derived from cryptocurrencies as an \u201copportunity.\u201d Yet crypto is enabling low-level investors to participate in commercial real estate transactions, for just one example.]<\/p>\n\n\n\n

The White House also says that \u201cminor increases in local tax revenue\u201d from crypto mining are more than offset by increased energy prices for firms and households. Imposing an onerous tax on crypto mining might, the White House admits, drive companies to countries with dirtier energy production, but so what? We would be rid of them.<\/p>\n\n\n\n

With Senator Elizabeth Warren leading the assault, there is the possibility that crypto (like oil, gas, and coal) will be banned worldwide. Already, China banned crypto mining (in 2021) \u2013 a major reason for increased crypto mining in the U.S. Several other countries have also banned crypto mining and three Canadian provinces have announced or enacted crypto mining moratoriums.<\/p>\n\n\n\n

Some states and localities are even charging crypto miners higher rates or restricting<\/a> their activities. New York\u2019s Governor Kathy Hochul gleefully signed a law banning bitcoin mining operations that use carbon-based power sources. The law also bars crypto miners from expanding or renewing their permits for the next two years unless they can demonstrate that they use 100 percent renewable energy; it also bars new entrants from coming online.<\/p>\n\n\n\n

In short, the DAME tax is part of a coordinated strategy to eliminate crypto mining and token exchanges altogether, at least until the federal government finds a way to completely control the crypto marketplace and perhaps determine who may and may not participate in wealth creation using digital assets.<\/p>\n\n\n\n

The CEI report calls the proposed DAME tax part of President Biden\u2019s \u201cwhole-of-government\u201d tax and regulatory agenda and part of a broader effort to force the wealthy and corporations to pay higher taxes. Under the scheme, agencies like the Securities and Exchange Commission (SEC) fit their regulation of the crypto sector into their broader goal of fighting climate change.<\/p>\n\n\n\n

According to the CEI report, a comparative analysis across industries reveals that crypto\u2019s energy footprint is not disproportionately large in comparison to, say, gold or copper mining. Moreover, the energy use of aspects of the traditional payments system, including bank data centers and bank branches, exceeds that of Bitcoin by most reasonable measures.<\/p>\n\n\n\n

CEI\u2019s authors also disagree with the White House\u2019s premise that crypto\u2019s use of electricity is without a beneficial purpose. Instead, crypto mining is instrumental in maintaining the security and integrity of decentralized networks and in creating a new, potentially more secure financial ecosystem with increased financial inclusion and enhanced transaction privacy.<\/p>\n\n\n\n

Perhaps the strongest argument against the DAME tax, CEI says, is that an electricity tax targeting only the crypto mining industry \u201csets a terrible precedent.\u201d It is the government once again interfering with the market and picking winners and losers \u2013 and then taxing the chosen \u201closers\u201d to force them out of business or under total federal control. [Just like EV mandates!]<\/p>\n\n\n\n

Crypto is still in its infancy as an industry and is rapidly evolving and shedding unscrupulous players, especially from the new generation of secured-asset crypto firms. Imposing a tax scheme aimed at stifling the growth of the industry runs the risk of depriving the Treasury of huge new revenue streams from existing taxes and fees.<\/p>\n\n\n\n

Given government\u2019s incessant demand for a greater share<\/a> of gross domestic product (already well above 30 percent, the highest since World War II), there should be little doubt that, should this unwelcome proposal ever become law, the government could readily find other industries upon which to impose specialized electricity use taxes.<\/p>\n\n\n\n

The goal is obvious: More revenue and more control for the government and less and less for the people.<\/em><\/strong><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The Biden Administration\u2019s proposed fiscal 2024 budget included a new proposal for the Digital Asset Mining Energy (DAME) excise tax with a goal of taking 30 percent of the cost of electricity used in cryptocurrency mining for the federal treasury.<\/p>\n","protected":false},"author":121246920,"featured_media":299162,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"The Biden Administration\u2019s proposed fiscal 2024 budget included a new proposal for the 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