Prominent right-of-center groups and individuals have floated the idea recently of backing a carbon tax that uses its revenue to offset other taxes or pay down the national debt. But a new industry report casts doubt on the viability of that policy, and the contradictory proposals of carbon tax proponents underscore those concerns.
Many of those proponents have touted right-of-center support for a carbon tax proposal that would use revenue raised for fiscally conservative ends: shifting the tax burden from income (e.g. the payroll tax or the income tax) to consumption, and a reduction in the federal budget deficit.
A report released Tuesday by the Institute for Energy Research (IER) says that such hopes are misplaced. As IER points out,
Even if the carbon tax revenues are initially devoted 100 percent to reducing the burden of other taxes, it would be quite naïve to trust the government to honor this deal forever. It is far more likely that during the next fiscal crisis, the government would raise payroll, income, and/or other tax rates, while keeping the new carbon tax in place.
Indeed, Americans for Tax Reform president Grover Norquist said Tuesday that a full repeal of the income tax would be required before he would consider supporting a carbon tax. Even then, he added, “it would be a foolish and economically destructive thing to do.”
Read more at The Foundry. By Lachlan Markay.
Photo credit: peace chicken (Creative Commons)