Conservative House members Jeff Flake (R-AZ) and Bob Inglis (R-SC), along with Rep. Dan Lipinski (D-IL), have introduced an alternative to the cap-and-trade proposal developed by House Democrats: HR 2380, the "Raise Wages, Cut Carbon" Act of 2009. Their proposal is for a carbon tax that will gradually increase over time, offset by a reduction in payroll taxes. Here's Rep. Flake's explanation:
If there's one economic axiom, it's that if you want less of something, you tax it. Clearly, it's in our interest to move away from carbon. But if we're going to take the step of taxing carbon, that needs come with commensurate tax relief.
This legislation forces us to have an honest debate about protecting the environment, rather than simply raising more revenue for the federal government. Further, we shouldn't put ourselves in the position to decide what industries, whether it be nuclear or wind or solar, come out on top. Let's face it, government just isn't very good at making these choices.
You can be agnostic on the question of global warming and still recognize that, as a country, we need to move away from carbon. Republicans have articulately made the case that the U.S. needs to become energy independent, but the truth is that as long as we rely so heavily on fossil fuels, it's going to be awfully tough to get there from here.
I've been arguing that a revenue-neutral carbon tax is preferable to cap-and-trade for some time (see here and here). The real dealing has yet to begin, and already the House cap-and-trade bill is being watered down to accommodate corporate interests, and it will only get worse. I have no illusions about the likelihood of a "clean" carbon tax bill emerging from Congress, but I believe cap-and-trade is inherently more vulnerable to special interest manipulation -- a problem made worse since so few people understand what cap-and-trade means. As actually implemented, cap-and-trade is also less likely to spur the sort of innovation necessary to meet even less-ambitious climate targets, particularly if Congress insists on combining it with energy portfolio standards that constrain the market's ability to shift toward the most efficient means of emission reductions. So, in the case of carbon, it's time to consider a revenue-neutral tax.
Related Posts (on one page):
- Climate Policy as Sausage Making:
- Political Ignorance and the "Cap and Trade" Proposal:
- "Raise Wages, Cut Carbon":