- - Sunday, February 12, 2017


I have nothing but respect for former Secretaries of State Jim Baker and George Schultz, but come on gentlemen: you’ve been snookered.

These two esteemed gentlemen are endorsing a tax scam that would be one of the largest income redistribution schemes in modern times. It would do considerable and lasting damage to the U.S. The justification for the tax is that it will save the planet by reducing greenhouse gas emissions, but it won’t even do that.

The Baker-Schultz plan would impose on America a carbon tax, which would be a tax on American energy consumption. Since energy is a central component of everything that America produces, it would make the cost and thus the price of everything — and I mean everything — produced in America more expensive. It is a tax that only China, India, Mexico, and Russia could love.

The tax is highly regressive so the remedy that Mr. Baker and Mr. Schultz call for is a welfare check to every American — which they call a dividend. Somehow they have come to the conclusion that two really bad ideas paired together make for a good idea. Huh?

So let’s get this straight. We are going to tax the producers of the economy and then give the money to people who don’t produce and this isn’t going to negatively affect the economy? If this makes sense then why not adopt a 100 percent tax of production and then redistribute the money to everyone?

My colleague Katie Tubb at the Heritage Foundation has noted another glaring flaw with the carbon tax. While it is true that a carbon tax is a much more efficient way to cap carbon dioxide emissions than the mishmash of EPA regulations, renewable energy standards, and subsidies for wind and solar power, the high likelihood is that the carbon tax will not be a replacement for these economically destructive policies — rather an addition to the regulations and subsidies. It is naive in the extreme to think otherwise.

I’ve been somewhat open-minded to a carbon tax in the past. The idea of replacing our current, economically destructive tax system with something less economically destructive is attractive. But the reality is that even a carbon tax perfectly administered is a poor substitute for the strong tax and regulatory reform that is currently possible.

But the green plan proposed by these former Reagan statesmen would not cut a single tax rate while giving the left a massive new tax regime. How could any conservative support this plan?

Even worse is that the Baker-Schutlz plan does close to nothing to reduce greenhouse gas emissions or to lessen the threat — if one exists — of global warming. Here is why. Whether or not the U.S. reduces its carbon emissions has close to zero impact on worldwide carbon dioxide emissions. This is because China and India are building coal-burning energy plants at such a frantic pace. The Wall Street Journal reported in November that just the increase in coal production in China in the next few years will mean more carbon dioxide emissions than the entire energy production of Canada. India isn’t far behind.

So it is a fairy tale that China and India and other fast-developing nations have any commitment to reducing their fossil fuel use. They are doing just the opposite. And as Mr. Trump would say, they are laughing at America behind our back. They would be absolutely gleeful about the U.S. carbon tax idea. By raising the cost of production of U.S. goods and services — everything from steel to corn — it will transfer production to their nations. They will play America like a fiddle. We will get relatively poorer and they will get relatively richer.

Oh and if you are a global warming worrier, the impact on overall planetary greenhouse gases will go up, not down. This is because the United States has the cleanest energy (especially coal) and the nation’s like China and India have much, much dirtier energy. We have clean coal regulations. None of the developing nations do. The less America produces, the worse it is for the planet.

What is so frustrating about this is that the best way to reduce global greenhouse gases is for the U.S. to produce more of our domestic energy, not less. We have very cheap and abundant natural gas (thanks to fracking) and we should export it all over the world. The U.S. has reduced carbon emissions more than any other nation not because of regulations or wind subsidies but because of shale gas. Let’s sell it to every corner of the globe and get rich plus save the planet.

The Baker-Schultz plan will do nothing to save the planet, but it will surely make America poorer.

• Stephen Moore is a distinguished visiting fellow at the Heritage Foundation and a senior economic analyst with CNN.



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