Lawmakers 'Revenue-Neutral' Carbon Tax Proposal Is Actually A $1 Trillion Tax Hike - Report
The bipartisan House Climate Solutions Caucus claims is pushing a “revenue-neutral” carbon tax, but legislation proposed Thursday would increase taxes by at least $1 trillion over the next decade, according to Paul Blair, director of strategic initiatives for the right-leaning policy institute Americans for Tax Reform.
Reps. Ted Deutch, a Democrat, and Francis Rooney, a Republican, reintroduced a bill Thursday that would place a $15-per-ton tax on carbon emissions in 2019.
The tax would rise by $10-a-year increments until it hits nearly $100 per ton.
“To let the free market price out coal we should consider value pricing carbon,” Rooney said in a statement. “A revenue-neutral carbon fee is an efficient, market-driven incentive to move toward natural gas and away from coal, and to support emerging alternate sources of energy.”
Though Rooney claims the tax is “revenue-neutral,” the plain text of the bill does not include any reciprocal tax cuts to balance out the burden of the added tax on emissions, Blair told The Daily Caller News Foundation.
The Climate Solutions Caucus, co-led by Deutch and Rooney, claims the bill is “revenue-neutral” through carbon dividends. The IRS will pay out the funds raised by the tax to U.S. households, giving “100 percent of net revenues to the American people” and maintaining the bill’s revenue neutrality
“Historically and for anyone engaged in tax policy, the definition of ‘revenue-neutral’ is and always has been if you increase a tax, the amount of revenue it generates must be offset by an equal tax cut elsewhere,” Blair said.
The left-leaning Tax Policy Center shares Blair’s view, defining a “revenue-neutral” tax proposal as one “in which provisions that raise revenues offset provisions that lose revenues so the proposal in total has no net revenue cost or increase.”
“For the political left and the political right engaged in tax policy, the definition is and always has been that there must be an additional and off-setting tax cut, not a spending program that sends people ‘apology checks’ in the form of welfare for the consequences imposed upon them by a tax increase,” Blair said.
He pointed out that the “apology checks” sent as carbon dividends would be treated as new spending and would not negate a new tax burden.
The tax proposal’s weight on the U.S. residents and businesses is likely to equal at least $1 trillion over the course of a decade.
The Congressional Budget Office scored a similar proposal of a flat $25-a-ton tax on carbon emissions in December 2018. The CBO found that the $25-a-ton tax would raise more than $1 trillion in new tax revenue over the course of a decade.
Deutch and Rooney’s proposal, though it has not yet been scored, would raise taxes at least that amount over 10 years and possibly much higher because of the tax’s $10-a-year increase up to nearly $100-a-ton, Blair told TheDCNF.
Rooney’s office did not respond to a request for comment by press time.
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