“The creation of any new tax such as a VAT or energy tax — even if originally passed with offsetting tax reductions elsewhere — would inevitably lead to higher taxes as two taxes would be at the disposal of politicians to increase taxes,” said ATR President Grover Norquist. “There is no conceivable way to add an energy or VAT tax to the burdens American taxpayers face that would not violate the pledge over time.”
Yet some say that both systems can work to complement one another, and that lawmakers will make sure companies aren’t double taxed.
“What Congress could do and probably would do, given the strength of California’s delegation, is say, ‘OK, if you’re participating in the (cap-and-trade system), you don’t have to pay the tax,’” said Florida State University law professor and author of the book “The Case for a Carbon Tax,” Shi-Ling Hsu. “For sure, they’re not going to make those companies double pay.”
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