Grover Norquist, the influential lobbyist who has bound hundreds of Republicans to pledge never to raise taxes, said a proposed “carbon tax swap”—taxing carbon pollution in exchange for cutting the income tax—would not violate his pledge.
This admission may help open the bipartisan dialogue on climate change, given the reluctance (to say the least) of Republicans to have those important discussions regarding the environment. On the heels of the election where the Americans who voted showed a rejection of the status quo environmental policy, it would behoove Republicans to jump on the progressive bandwagon, at least pertaining to reducing the impacts of climate change and saving the environment.
Even a modest carbon tax can deliver large revenue, with reports coming out since September detailing a $20 per ton tax which could reduce the deficit by $1.2 trillion in 10 years. The two critical components of a carbon tax are:
1. Is a tax politically feasible?
2. Is the politically feasible tax environmentally meaningful?
Combined with pre-existing policies in place, such as the fuel economy standards, a carbon tax from $15 to $25 per ton of CO2 would almost certainly achieve a CO2 cut greater than 17% by 2020, which was President Obama’s pledge going into the Copenhagen climate talks, making the carbon tax politically feasible.
Further, the United States could set a global precedent on carbon taxes and emissions, resulting in serious consideration by other developed countries to follow suit. This would be an environmentally meaningful policy for not only the United States, but also the world.
However, to follow the guidelines of the Norquist pledge, income taxes must be cut to compensate for the carbon tax rise, which may not be the wisest decision for the country.
A lowered income tax could decrease the amount of revenue for the federal government, slowing the economic recovery. Additionally, carbon taxes don’t necessarily mean lower emissions, since polluters can just buy into the system more to pollute more.
All in all, a carbon tax is probably the most feasible manner in which to initially combat a rise in emissions and the damage from climate change, but coupled with an income tax cut could create a situation where economic goals cannot be met.Tweet
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