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- The DAME Act, rejected by lawmakers last year, is back on the table and could be part of the 2025 budget, which takes effect in October.
- It proposes a ludicrous 30% excise tax on electricity used by miners, which would effectively wipe out the industry in the US, drawing criticisms from several industry leaders and lawmakers alike.
President Joe Biden’s administration has not concealed its anti-crypto stand. From proposed draconian taxes to pursuing DeFi and DAOs through agencies such as the SEC, it continues to crack down on the rapidly growing sector. However, its most blatant anti-crypto stance might be in its DAME Act, which seeks to wipe out miners with operations in the US.
Biden first proposed DAME, or the Digital Asset Mining Energy (DAME) tax, in the proposed 2024 budget a year ago. The biggest change would be a 30% tax on all electricity costs, starting at 10% in the first year, 20% the year after and 30% every year after that.
The preposterous proposal caused uproar from the digital asset community and beyond. Senator Cynthia Llumis from Wyoming described it as punitive and said it would “destroy any foothold the industry has in America.”
The White House 2025 budget is incredibly bullish on crypto assets, some might even say they believe it’s going to the moon.🚀
But a proposed 30% punitive tax on digital asset mining would destroy any foothold the industry has in America.
— Senator Cynthia Lummis (@SenLummis) March 11, 2024
While the Biden government backed off on the proposal following the uproar, it’s now backing the bill again. White House projects that DAME will bring in $3.5 billion over the next decade. It further describes the bill as the government’s way of ensuring that Bitcoin miners “pay their fair share of the costs imposed on local communities and the environment.”
Industry in Uproar Over Biden’s Mining Bill
Expectedly, the crypto community is once again uniting in its opposition to the DAME Act. In a scathing op-ed, Kadan Stadelman opines that the effects of the bill would be catastrophic for America.
Stadelman is the CFO of Komodo, a composable blockchain network with a multi-chain design.
Kadan noted that first, the new bill would kill off mining in the country. Most miners would be unable to keep up with the fees, especially since power is the biggest expense for the sector. This group will end up closing shop. The bigger miners with more resources will shift their operations elsewhere. Ultimately, the Biden government will get a higher percentage of taxes from a very small group of miners.
Even the White House acknowledges that the bill could force miners to relocate.
As Kadan further notes, the Biden administration seems to take refuge in the fact that it’s not the first government cracking down on miners—China has been anti-Bitcoin for years now.
“In light of that comment, no one should be surprised if Biden proposes for a total moratorium on mining — particularly if his tax doesn’t pass,” Kadan states.
Biden’s anti-crypto war comes as his popularity and support are shrinking, yet his rematch against Donald Trump is edging closer. By promoting responsible mining, Biden could endear himself to millions of crypto holders in the US, especially since Trump is anti-Bitcoin.
