The people pushing for a “carbon tax swap deal” have shifted their arguments; conservatives and libertarians have already achieved fiscal and regulatory victories that they were told would be impossible

Trump Administration Should Be Wary of Shifting Carbon Tax Pitch


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By —— Bio and Archives April 19, 2017

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An op-ed in The Hill from the R Street Institute showcases yet again the shifting goal posts in the carbon tax debate. Before Donald Trump won the White House, a few vocal writers urged conservatives and libertarians that only by offering a massive new carbon tax, could they hope to win the rollback of top-down environmental regulations. Yet now that the Trump Administration is moving forward on such a rollback, the argument (from R Street and others) is that we should still go ahead with a carbon tax anyway. Besides the shifting rhetoric, these appeals also mislead readers on just how damaging a carbon tax would be to the economy—as even its supporters implicitly admit with their own models.

R Street Wants to Snatch Defeat From the Jaws of Victory

Catrina Rorke, R Street senior fellow and author of The Hill op-ed, pitches Republicans on a carbon tax in this way:

If the administration is serious about getting tax reform over the finish line, [a Value Added Tax or a carbon tax] would be two pretty good bets to raise revenue.

In 2010…deficit reduction was the cause du jour. While the debate ultimately resulted in budget sequestration…a number of commissions…assembled proposals to improve fiscal discipline and reform the tax code. Of the seven most prevalent proposals, four included revenue from either a gas tax or carbon price…

A carbon price…fits well into the administration’s other plans. As part of the campaign, President Trump promised again and again a new way forward on regulation and energy. In an executive order last week, Trump ordered the substantial rollback of a number of regulatory policies to address carbon emissions, on top of a requested 31 percent cut to the Environmental Protection Agency’s budget…

If this year’s health-care debate proved anything, it’s that efforts to roll back Obama-era policies are highly susceptible to political backlash….Pairing permanent removal of the EPA’s authority to regulate carbon emissions with a transparent carbon price might take the fire out of potential protests, give the GOP the upper hand in a major environmental-policy fight and bring moderate Democrats into the fold on tax reform.

Moreover, carbon pricing can raise serious revenue. A 2013 estimate from the Congressional Budget Office suggested that a carbon tax could raise $1.2 trillion over 10 years…R Street research suggests that even a relatively modest carbon price actually could replace corporate taxes entirely, turning the United States into the most competitive investment climate in the world. [Emphasis added.]

 

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