The False Promises Of A Republican Carbon Tax

Andrew F. Quinlan President, Center for Freedom and Prosperity
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Republicans control the White House and both chambers of Congress for the first time in a decade. That might not be true for long, however, if they give into the voices within the party and other special interests now calling for a carbon tax. Americans elected Republicans to cut taxes, not to raise them.

If you’re confused as to why Republicans would ever consider raising Americans’ energy bills, you’re not alone. However, the pitch recently made by some veteran beltway Republicans calling themselves the Climate Leadership Council (CLC)  is just seductive enough to be dangerous.

The CLC, which includes former Secretary of State James Baker, is trying to convince the Trump administration to trade repeal of Obama’s Clean Power Plan and other costly EPA regulations supposedly aimed at reducing carbon emissions in exchange for a new carbon tax. But what kind of trade is it really, when the Clean Power Plan is already floundering and the administration can remove overly burdensome regulations all on its own?

A $300 billion annual tax on carbon, which is what they are asking for, would mean an immediate 36 cent per gallon increase in the cost of gasoline. That would also be just the beginning, as they want the tax to increase over time.

We’re supposed to take comfort in the promise that the revenues raised by the tax would be rebated to taxpayers—in theory reducing fossil fuel consumption without hitting our pocket books—but such assurances simply cannot be counted upon.

There would obviously be administrative costs to shuffling all this money around, for one thing, and future politicians would inevitably redirect the funds toward pet political projects and vote-buying schemes.

Even worse, once Democrats return to power much of the regulatory relief “traded” for the tax will likely be undone. We’ll be right back where we started with overly burdensome environmental regulations and a new tax on consumers to go with them.

That’s why it makes zero sense for Republicans to do the heavy lifting on their behalf by being the ones to impose this new tax on the American people and suffer the electoral consequences.

Those pushing for a carbon tax argue that something must be done to stop “climate change,” and that this is the most market-friendly option available.

But it’s rather telling that the environmental groups themselves often don’t act as if they truly believe it is necessary. When the state of Washington was considering a ballot initiative in November to impose a tax on carbon emissions, many environmental groups opposed it because other taxes would have been lowered to offset the levy. They were more concerned about growing government than the environment.

That’s no great surprise, as even the EPA’s own models show that entirely eliminating all carbon emissions in the United States—an impractical and undesirable goal—would reduce warming by little more than a tenth of a degree by the end of the century.

It’s easy to understand why someone like Elon Musk—who is also whispering about the tax to President Trump—wants to impose new taxes on Americans. His electric car company, Tesla, would benefit by making traditional gas vehicles more expensive. But the rest of Americans who aren’t billionaires and can’t count on crony handouts from government would lose big, which is why it’s very puzzling that Republicans would be seriously considering the political and economic loser that is a carbon tax.

Andrew F. Quinlan is the co-founder and president of the Center for Freedom and Prosperity (@cfandp).