Carbon tax's triple header
We are in the luxurious position of having multiple carbon tax bills floating around Washington, DC, including two sponsored by Florida's Rep. Francis Rooney, enough to make the EcoRight jump for joy. But how to distinguish between them? Especially given, in what Niskanen Center appropriately calls "a signal of bipartisan goodwill," Rooney and Illinois Democrat, Rep. Dan Lipinski co-sponsored each other's carbon tax measures, introduced on the same day.
We've broken out the basics for you.
The Stemming Warming and Augmenting Pay (SWAP) Act, which would cut carbon emissions by approximately 42 percent by 2030 while using the revenue to reduce the payroll tax burden on Americans. This bill would:
- Assess on fossil fuel producers and large industrial emitters a fee of $30/metric ton of CO2 equivalent with an annual increase of five percent plus inflation. For every two years that emissions reductions are behind goals, an automatic $3 per ton increase will be charged.
- Use 70 percent of net revenue raised to reduce individual, employer, or self-filing payroll taxes amounting to a nearly one percent cut in the total payroll tax rate.
- Distribute ten percent of net revenue to social security beneficiaries.
- Use the remaining 20 percent of the revenue to establish a carbon trust fund designated for state block grants used to offset higher energy costs for low-income households, and advanced research and development programs on climate adaptation and energy efficiency.
This proposal also places a 12-year moratorium on Clean Air Act regulations that can be removed if emissions targets are not met.
By contrast, the Raise Wages, Cut Carbon Act looks familiar to us. Once the baby of former Rep. Bob Inglis, Lipinski reintroduced this carbon tax bill, which would impose a fee starting in 2020 of $40 per ton of CO2. Like the SWAP Act, the tax would:
- Increase by 2.5 percent plus inflation for every year that the United States does not meet emissions reduction targets, thereby allowing the price to gradually adjust based on market signals until emissions reduction targets are met.
- Return revenue generated to Americans via a payroll tax cut and an increase to social security benefits for beneficiaries.
- Direct one percent of revenues to the Weatherization Assistance Program and five percent to the Low-Income Home Energy Program to help offset increased energy prices for the most vulnerable.
On the Senate side of Capitol Hill, Senator Chris Coons reintroduced the bill he co-sponsored with former Senator Jeff Flake, who retired at the end of the last Congressional session. The Climate Action Rebate Act of 2019, would start greenhouse gas fees at $15 per metric ton of carbon and gradually increase the fee over time. The fee would be returned to Americans as a dividend.
Carbon tax advocate and former Florida Rep. Carlos Curbelo noted, "not just rank and file from moderate districts, but leading Republicans, senior Republicans are stepping out on the issue, making it clear that the debate should be over solutions, not over science or anything else of that nature, and for me it's a sign of real progress."
We'll take it!