Excerpts from –
Some Democrats See Tax Overhaul as a Path to Taxing Carbon
By LISA FRIEDMAN AUG. 17, 2017 The New York Times
A version of this article appears in print on August 18, 2017, on Page A18 of the New York edition.
With a sweeping overhaul of the tax code on the horizon, two Senate Democrats believe this is the moment to broach the third rail of climate change policy: a carbon tax.
The plan by the senators, Sheldon Whitehouse of Rhode Island and Brian Schatz of Hawaii, to level a $49 per metric ton fee on greenhouse gas emissions is widely acknowledged as a long shot. But the lawmakers, along with climate activists and a cadre of conservative supporters, insist the tax reform is a way to create bipartisan support. The senators propose to use a portion of the estimated $2.1 trillion they anticipate in carbon tax revenue over the first 10 years to reduce the top marginal corporate tax income rate, something the White House has called for.
The senators steering the effort admit they haven’t even broached a carbon tax directly with members of the administration, and the White House has distanced itself from the policy. Yet even the fiercest critics of a carbon tax say they can’t afford to dismiss the effort.
The legislation calls for the tax, which would increase annually by 2 percent, to be collected at its source – at coal mines, oil refineries or ports of entry. The rest of the revenue would come back to taxpayers in an annual inflation-adjusted $550 refundable tax credit, or $1,100 for married couples filing jointly.
The idea of a carbon tax dates to the 1920s, when the British economist Arthur Pigou observed that some goods had social costs that society ended up paying for – like alcohol, or pollution.
Some conservative heavyweights, like Arthur Laffer, often called the father of supply-side economics, and Darren W. Woods, the chief executive of Exxon Mobil, have thrown their intellectual and political heft behind the idea.
“I won’t say it’s likely, but it’s more likely than it has been in some time,” said Eli Lehrer, president of the R Street Institute, a conservative think tank that supports a carbon tax. “And if the stars align perfectly, I could see a carbon tax happening.”
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Common Ground USA seeks to reduce taxes on labor and capital investment and increase taxes on the value of privately owned land, other natural resources, and other government-granted privileges.
