On Wednesday, a senior Democrat lawmaker in the United States criticized the government’s proposal to impose a 30% crypto mining tax. Presidential hopeful Robert F. Kennedy Jr. criticized the crypto mining tax proposed by the Biden administration and responded to concerns around crypto.
In a Twitter thread, Kennedy took a stand for crypto mining activities and counted on the technology to be a major part of innovation. Quoting him:
Cryptocurrencies, led by Bitcoin, along with other crypto technologies are a major innovation engine … Biden’s proposed 30% tax on cryptocurrency mining is a bad idea.
Referring to the government’s arguments around Bitcoin’s high energy consumption as a “selective pretext” to control threats against elite power structures, the lawmaker argued that proposals for controls on cryptocurrencies and crypto mining have a political connection.
Further, he suggested that the US economy will be more resilient if Bitcoin and other currencies are available along with the U.S. dollar. On Tuesday, the Biden administration proposed a 30% mining tax citing the industry’s negative impact on the environment.
The tax called the Digital Asset Mining Energy (DAME) excise tax, aims to make crypto companies accountable for their environmental impact, with the tax coming into effect after a phase-in period. Prior to this, the possible tax was also discussed during the annual budget session in March.
Taking up on the concerns of energy consumption that were highlighted by the government whilst laying out the proposal, Kennedy conceded that energy consumption involved in Bitcoin mining is a “concern.” However, he added that mining uses approximately the same amount of energy as video games do and noted that gaming does not face calls for regulation.
In regards to the source of his data, Kennedy chose to not disclose it. Sources have cited one possible source a 2020 estimate from the mining group Braiins, which suggests that video gaming consumes 104.7 TWh of energy per year globally. Interestingly, data from Cambridge University suggests that Bitcoin mining currently uses 131.53 TWh of energy per year in total.
Further, Kennedy stated that Bitcoin is not only used by “criminals who want privacy,” as has been highlighted by critics. He added that political dissidents and regular citizens might also have a need to use Bitcoin as governments can control bank accounts and payments. Reportedly, his assertion about crimes associated with crypto is also supported by some statistics.
Crypto mining has been on the regulator’s radar across the globe. In the US, considering the political divide between both parties, Democrat lawmakers have often been found to criticize and scrutinize mining activities. This marks Kennedy’s step in favor of mining of substantial importance.
In March, Democratic lawmakers announced that they would reintroduce the Crypto-Asset Environmental Transparency Act before the lawmakers. The bill would mandate any crypto mining firm consuming more than 5 megawatts of power to disclose emissions for operations and require the administrator of the Environmental Protection Agency (EPA) to head up an interagency investigation of the impact of crypto mining in the United States.
Additionally, respective states in the US have individual stances as states like New York and North Carolina appear to be stricter than others. While North Carolina is discussing enforcing a moratorium on crypto mining, states like Mississippi and Monata are proceeding with mining-favoring legislative bills.