The Tech Transparency Project, or TTP, a research initiative by US non-profit watchdog group Campaign for Accountability, has published a report alleging that crypto firms have provided “little in return” to state governments by offering financial incentives.
In a report released Thursday, TTP said that many crypto firms based in certain U.S. states have “received special advantages” to set up operations without always providing jobs, economic growth, or tax breaks for residents. According to the group, crypto lobbyists have been working on behalf of firms to secure tax breaks and drive down energy prices, while state governments are “faced with budget shortfalls, rising energy consumption and severe environmental damage.”
A new TTP report outlines favorable laws and tax breaks from state governments from Nevada and Wyoming to Kentucky to speculative cryptocurrency projects that have failed to deliver the promised job creation and social benefits for taxpayers. https://t.co/ZEkqyQCCa1
— Technical Transparency Project (@TTP_updates) August 4, 2022
The research team cited policies dating back to 2017, when state governments including Nevada, Wyoming, Montana, and Kentucky passed a cryptocurrency law to encourage firms to open stores. For example, in Montana, the TTP reported that politicians passed a law in 2017 that reduces property taxes on data centers used for cryptocurrency mining. Mining companies moved here, only to later see residents complain about “excessive noise, waste and energy consumption” and call for a moratorium.
In the state of Wyoming, where lawmakers have passed bills to exempt crypto firms from property taxes and there is no income tax for state residents, TTP reported that blockchain-based payment company Ripple was not offering jobs in the state, while cryptocurrency exchange Kraken listed only one. In 2020, Wyoming Gov. Mark Gordon said he had to consider “devastating but necessary” budget cuts for government departments, and lawmakers are reportedly considering similar measures for K-12 education in 2021, although the economic impact of the pandemic could also play your part.
“At a minimum, the public should have a say in these cryptographic handouts. Especially in states suffering from economic problems, the perception of innovation should not take precedence over material benefits for taxpayers.
Georgian lawmakers consider tax exemption for miners in new bill
Kentucky legislators voted to eliminate the sales tax on electricity purchased by local crypto mining operators in 2021 and made mining companies eligible for state tax credits aimed at clean energy businesses. Report came out The State Budget Office estimated in November 2021 that these stimulus costs the state about $11.6 million a year.
“It’s too early to tell how much these measures, which went into effect on July 1, will actually cost Kentuckians,” TTR said. “But several government programs are already facing significant budgetary pressures that could be exacerbated by crypto incentives. […] Tax breaks are also unlikely to create new jobs in Kentucky.”
Credit : cointelegraph.com