Taxing Carbon: What, Why and How

Tax Policy Center / by Donald Marron, Eric Toder, and Lydia Austin

[From a Climate Wire article by Emily Holden, sub. req’d] A nationwide carbon tax — though difficult to implement for practical and political reasons — could significantly reduce greenhouse emissions while funding priorities on both sides of the aisle, according to a new report from the Tax Policy Center…

The Tax Policy Center relied on figures from the congressional scoring agencies, the Joint Committee on Taxation and the Congressional Budget Office. In 2013, they estimated the revenue impacts of a $25 per ton carbon tax increasing 2 percent faster than inflation. The report used CBO’s latest budget projections to find that a carbon tax would bring in $1.6 trillion over a decade, a net value of $1.2 trillion, after subtracting $400 billion in lost income and payroll taxes.

That amount could be used to balance the budget or fund new climate initiatives. Or it could provide direct payments to individuals, or cut payroll, corporate or personal income taxes…


One thought on “Taxing Carbon: What, Why and How

  1. Pingback: This Week in the RFF Library Blog : Common Resources

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