Carbon tax could solve problemsPublished 3:34pm Saturday, April 6, 2013
At the national level, Republicans and Democrats cannot seem to cooperate and come up with fiscal solutions. In a recent column, Thomas Friedman proposed an idea that has been promoted at various levels of government: a carbon tax. Such a tax, he notes, “could close the deficit, clean the air, weaken petro-dictators, strengthen the dollar, drive clean-tech innovation and leave money so we could lower corporate and personal income tax.”
Friedman suggests that an annual carbon tax of $25 per ton of carbon emitted would raise $125 billon annually. (This number comes from the Center for Climate and Electricity at the nonpartisan Resources for the Future).
Friedman further suggests that revenue from such a tax might be divided in the following manner:
• 45 percent to pay down the federal deficit.
• 45 percent to replace current income from lowered personal and corporate income taxes.
• 10 percent to be paid out as rebates to low income households for whom a higher gasoline tax and higher household heating and electrical would be too large a burden.
An estimated annual revenue of $125 billon from a carbon tax used to reduce current tax revenues would allow us to reduce personal tax income by 15 percent and corporate income tax by 70 percent.
It’s estimated that the suggested carbon tax would add $0.21 per gallon to the gasoline price and $0.012 per kilowatt hour to electrical costs, plus heating costs. This tax could be phased in gradually and would also provide incentives for companies to operate more energy efficiently.
Friedman notes that fossil fuel, auto and power company’s control a lot of politicians who would try to block a carbon tax. Right now, one of the few legislators promoting it is Rep. Henry Waxman from California.
For more information on the carbon tax, Friedman recommends a book by Adam Garfinkle, editor of “American Interest,” called “Broken: American Political Dysfunction and What do Do About It.”
If such a tax makes sense to you, please contact your legislator.