By Institute for Energy Research
March 27, 2013
Last weekend the Senate rejected an amendment to the FY 2014 budget that would have enacted a carbon tax. For those interested in affordable energy and job creation, this was a good thing. Still, it’s worth walking through the actual wording of Senator Whitehouse’s amendment to see just how duplicitous it was. Even if someone knew nothing of the climate policy debate, the rhetorical sleight of hand in Whitehouse’s proposal should raise alarm bells.
A Tax By Any Other Name Would Hurt the Economy Just as Badly
An LA Times story on the vote shows just how slippery Whitehouse’s description is: “Sen. Sheldon Whitehouse, a liberal Rhode Island Democrat, offered an amendment to the proposed fiscal 2014 budget resolution calling for ‘establishment of a fee on carbon pollution.’”
This is the same euphemism that Senators Boxer and Sanders used. Let’s be clear: A “fee on carbon pollution” means that the federal government is going to tax Americans for using energy in its most economical forms. If the IRS started calling it a “fee on worker exertion,” it would still be a payroll tax.
There are many economists and other analysts who think that a carbon tax makes sense. If so, legislators should openly state what they want to do. They want to tax carbon emissions? Fine, let them explain their intentions to the voters and see what happens. But to frame it as “a fee on carbon pollution” is loading the deck.
When Everything Is Allowed, Nothing Is Forbidden
Yet the “fee” euphemism is hardly the worst of it. The LA Times story continues:
The amendment didn’t suggest who’d pay the fee or how large it would be; it required only that the fee not increase the deficit and that all the revenue raised be “returned to the American people in the form of federal deficit reduction, reduced federal tax rates, cost savings or other direct benefits.”
That’s such a wide set of options, it left room for the Senate to consider all of the carbon-tax proposals that have been floated. Some would use the revenue to narrow the federal budget gap; others would lower corporate and personal tax rates. Still others, such as the one favored by the Citizens Climate Lobby, would divvy up the money among consumers and businesses in the form of rebates, effectively shifting dollars from the most intensive carbon emitters to the least.
The article here understates the emptiness of these “constraints.” Not only did Whitehouse’s amendment allow “all of the carbon-tax proposals that have been floated”; it would be difficult to imagine a carbon tax proposal that would not qualify. No matter what the government did with carbon tax receipts, they could always classify it in one of the permissible categories.
Continue reading at Senator Whitehouse’s Duplicitous Carbon Tax Amendment.