A Carbon Tax Is Bad Climate Policy | The New Republic

Source: A Carbon Tax Is Bad Climate Policy | The New Republic

After a few weeks of being compared to Franklin D. Roosevelt and Lyndon B. Johnson, Joe Biden seems to be losing some of his transformational zeal. The administration is reportedly walking back from initial plans to make the child tax credit provided by the American Rescue Plan permanent, and is feeling newfound pressure to balance out new spending with tax hikes. The White House’s total Build Back Better Agenda could now top $4 trillion, which is more than the $3 trillion that had been floated last week. But it intends to pair that bigger package with $3 trillion worth of tax increases, citing concerns about political buy-in and the size of the federal deficit.

Those are slated to be taxes on wealthy investors, corporations, and the rich. New York Times White House correspondent Jim Tankersley tweeted Tuesday night that the first $2 trillion phase of the Build Back Better agenda will reportedly be spent over 8 years, and paid for by corporate tax hikes over 15 years. But the Washington Post editorial board recently suggested another idea to finance new spending: “The need for funds is so great, and energy-saving such an important goal of the administration, that new revenue from carbon taxation should not be left out.”

Upcoming infrastructure and recovery bills are widely seen as the first and potentially last opportunity to shepherd big climate policy through this Congress. The United States doesn’t need to raise taxes to do so. And while framed as a win for both fiscal and environmental sustainability, tying green infrastructure or any other spending to a carbon tax, in particular, could prove riskier than its proponents claim.

There’s a very good case to be made for raising taxes on corporations and the wealthy—including for the climate: As University of Toronto political scientist Jessica Green argued in a recent paper on the subject, cracking down on corporations’ offshore tax havens helps limit their enormous power to warp politics in ways that have made comprehensive climate policy impossible so far in the U.S. The rich, Green pointed out, are also the planet’s most prolific greenhouse gas emitters. According to the United Nations Environment Program, the richest 1 percent of the world’s population account for more than double the greenhouse gas emissions of the poorest 50 percent. That wealthy people are now pouring their excess money into carbon-intensive digital currencies and non-fungible tokens should be evidence enough that our tax policy is out of whack.

Passing tax hikes on the rich isn’t easy. But a carbon tax, not unlike the fuel tax Transportation Secretary Pete Buttigieg first proposed on Monday then immediately walked back, comes with the risk of sparking unnecessary political backlash for little discernible gain. Raising taxes on the wealthy and corporations, not to mention repealing the intangible drilling costs tax break and other production subsidies that line the pockets of fossil fuel executives, could go a long way toward curbing emissions and be an easier sell to voters.