- The Washington Times - Sunday, February 19, 2017

Republican leaders on Capitol Hill and their anti-tax allies are moving quickly to crush conservative proposals for a carbon tax before they even have time to breathe.

The carbon dividends plan, recently put forth by Republican elders such as James A. Baker III and George P. Shultz, has been cast as something of a conservative blueprint for how to address pollution while returning thousands of dollars to American taxpayers.

For a few days, at least, the plan reignited carbon tax talk within Republican circles, where such conservations had been dormant for years. The elders’ Climate Leadership Council even met with high-ranking White House officials two weeks ago.

But the supposed rebirth of the carbon tax debate lasted briefly. House Speaker Paul D. Ryan, Wisconsin Republican, and the powerful House Ways and Means Committee confirmed separately last week that any form of the notion has zero chance of even being considered in this Congress.

Doug Andres, a spokesman for Mr. Ryan, said he could rule out any plans for a carbon tax, echoing the House Ways and Means Committee, the panel responsible for writing tax law.

Meanwhile, a coalition of groups outside government — including the American Energy Alliance and Grover Norquist’s Americans for Tax Reform — sent a letter asking the White House for a meeting with chief economic adviser Gary Cohn.

The purpose of such a meeting, they said, is to explain why any carbon tax proposal would hamper economic growth.

“Our organizations have significant concerns regarding any prospective carbon tax proposal. Such a policy would place undue economic burdens on American families and businesses by intentionally increasing the cost of the energy they rely on every day,” the coalition wrote.

The rapid pushback underscores how far the notion of a carbon tax has fallen in the eyes of leading Republicans.

A decade ago, prominent Republicans such as Sen. John McCain of Arizona supported a form of attaching financial costs to carbon emissions. His proposal favored something of a cap-and-trade system that, while technically not a tax, would offer financial incentives to cut emissions.

Such ideas now are all but absent from Republican policy prescriptions.

The Climate Leadership Council’s ambitious plan proposes a $40-per-ton tax on carbon emissions. That figure would increase steadily over time, council members wrote in an op-ed this month in The New York Times.

Unlike other carbon tax plans, which would deliver the money collected directly to federal coffers, the council’s blueprint called for the money to be returned directly to taxpayers. The group estimated that a family of four could expect a $2,000 check during the first year of implementation.

They argued the plan should, in theory, be palatable for all stakeholders.

“Environmentalists should like the long-overdue commitment to carbon pricing. Growth advocates should embrace the reduced regulation and increased policy certainty, which would encourage long-term investments, especially in clean technologies,” they wrote. “Libertarians should applaud a plan premised on getting the incentives right and government out of the way. Populists should welcome the distributive impact.”

Analysts say such an idea, while constructive in the sense that it kick-starts a conversation, is unlikely to gain much traction.

Instead, a more direct carbon tax combined with broader corporate tax rate reductions — designed to reduce financial burdens on businesses — would be more appealing to conservatives, said Aparna Mathur, an economic policy scholar at the American Enterprise Institute who has studied carbon tax proposals.

“People are so loath to talk about a carbon tax in the Republican Party, but I feel like something that could actually go through is something that combined a corporate rate cut with a carbon tax,” she said. “That creates the right incentive” by establishing a system in which businesses could save money by voluntarily reducing emissions.

But Ms. Mathur acknowledged the political reality in Washington, where Republicans — including President Trump, who has seemed to rule out a carbon tax — fear that even raising the notion of a tax could be a serious political liability. She speculated that some congressional Republicans may believe the council’s proposal, or something similar, is the best course of action but aren’t willing to take the risk of supporting it publicly.

“There’s a big disconnect between ‘Do I believe a tax is the best policy action and do I want to be out there talking about the benefits of a carbon tax when it’s not really my priority and I can see it being used against me?’” she said.

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