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Clearing the Air: Support the Carbon Tax Bill HR 1337, not Cap and Trade Bill 2454

By   Follow Me on Twitter     Message Scott Baker       (Page 1 of 1 pages)     Permalink    (# of views)   6 comments

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If you are concerned about Global Warming, AND want a bill that can actually pass the rural-dominated Senate, and is not regressive, you should support HR 1337, which taxes polluters directly for their carbon emissions.

The alternative currently favored by the Administration, Cap and Trade HR 2454, would issue permits to companies in a complicated exchange scheme whereby they would get some permits for free - actually, quite a lot in the early years, quite possibly enough to pollute with CO2 MORE than the currrently do - and be able to buy more permits from companies or countries engaged in Green initiatives - like planting trees, erecting Wind Turbines etc. The problem is that these permits might be obtained for things their Green counterparties were going to do anyway, negating the positive effect of Cap and Trade (i.e. Some Capping, but little actual trading). In the meantime, Wall Street will grow rich brokering the trades. According to Matt Taibi, Rolling Stone Magazine:

"Cap and Trade, as envisioned by Go(l)dman Sachs, is really just a carbon tax structured so that private interests collect the revenues... cap and trade will allow a small tribe of greedy-as-hell Wall Street swine to turn yet another commodities market into a private tax-collection scheme. This is worse than the bailout: it allows the bank to seize taxpayer money before its even collected."

Read more about the problems with Cap and Trade here.

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The alternative HR 1337, would be a straight tax on carbon that would return 96% of the money collected directly to the taxpayer, on a pro-rated basis in order to reduce the burden of regressive taxes like the payroll tax. In Al Gore's Vernacular, it would "Tax what you Burn, not what you Earn." The non-profit Carbon Tax Center answers 30 FAQs as to why a direct Carbon Tax is better than the byzantine Cap and Trade scheme, but just to highlight a few things in favor of this Geonomic/Georgist tax:

2. Why are carbon taxes essential? "...The transformation of our fossil fuels-based energy system to reliance on energy efficiency, renewable energy and sustainable fuels won't happen without carbon taxes sending the appropriate price signals into every corner of the economy and every aspect of life."
6. Why does CTC advocate carbon tax shifting? "To avoid burdening the less affluent, carbon tax proceeds should be returned to Americans through an equal, pro rata rebate or dedicated to reducing the tax burden of regressive taxes such as the federal payroll tax or state sales taxes (depending upon whether the tax is imposed at the federal or state level). Shifting the tax burden to pollution and pollution-generating activities will create powerful incentives to use less energy and emit less CO2 into the atmosphere while simultaneously promoting tax equity and minimizing the impact of the carbon tax on those with lower incomes."
7. Why does CTC advocate carbon taxes in addition to energy-efficiency standards? "Energy standards have improved energy performance by forcing product design changes in a few important sectors, principally major home appliances and U.S.-made automobiles. But standard-setting takes a long time, and standards alone tend to be static whereas energy use is ever-evolving. Carbon taxes combined with efficiency standards will achieve far more than the latter alone by encouraging manufacturers and builders to pro-actively maximize energy efficiency while giving consumers ongoing incentives to make cost-effective choices valuing efficiency in purchasing, traveling and daily behavior."
10. Why not just let market forces (like peak oil) lift fuel prices? "Market signals are too volatile in the short term and too weak in the long term to provide the effective incentives needed to rewire the U.S. for energy efficiency and renewables. Moreover, high prices alone, whether due to geological depletion or plain old gouging, would line the pockets of the energy industry and ravage the poor and middle class. They would also be counter-productive, since high prices, absent a carbon tax, would exacerbate global warming by unleashing production of costly and CO2-intensive fuels from "unconventional" sources such as Canada's oil sands. Only carbon taxes can provide the right combination of market correctives and protection of American families and our environment."
12. Would taxing carbon be regressive? Any flat tax is regressive, but the regressivity of the carbon tax could and should be minimized or eliminated by allocating the tax revenues to benefit the less affluent. The key fact is that wealthier households use more energy, on average they drive and fly more, have bigger (and sometimes multiple) houses, and buy more stuff that requires energy to manufacture and use. Most carbon tax revenues will come from families of above-average means, corporations and government, which creates a basis for progressive tax-shifting: transferring a portion of the tax burden from regressive taxes such as the payroll tax (at the federal level) and the sales tax (at the state level) onto pollution and pollution-generating activities. Another progressive approach is to rebate the carbon tax revenues equally to all U.S. residents a national version of the Alaska Permanent Fund, which annually sends identical checks to all state residents from earnings on investments made with the state's North Slope oil royalties. Because income and energy consumption are strongly correlated, most poorer households would get more back in rebates or tax savings than they would pay in the carbon tax.
14. How much revenue will carbon taxes generate?
A lot, if the taxes are set high enough to have the needed impacts. A federal "starter" carbon tax equating to 10 cents a gallon of gasoline, but applied to all U.S. fossil fuel burning, will bring in roughly $55 billion a year in revenue. This equates to around $180 per U.S. resident, or $720 for a family of four. (Thus, a family that paid less than $720 a year under this starter tax would come out ahead if the carbon revenues were rebated equally.) Successive carbon tax installments adding the same 10/gallon equivalent would each add another $50 billion or so to the aggregate annual revenue stream. By the end of the tenth year (assuming annual installments), the annual revenue would be on the order of $500 billion.

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There are many, many more reasons to support a direct Carbon Tax cited by the CTC.

We are all preoccupied by the Health Care Debate and Reform going on right now, but this is the next big fight. The Fossil fuels industry is already trying to frame the debate their way. We progressives need to counter-attack early by undercutting the following arguments:
1. Attack: A new tax will burden families.
Answer: No, the proceeds will be directly returned to the families most in need, while taxing heavy users of fuels and power.
2. Attack: It's too complicated to work.
Answer: No, it's much simpler to administer than a Cap and Trade scheme, and the EPA and other agencies have long histories of measuring pollution outputs.
3. Attack: It'll kill jobs.
Answer: No, it'll create jobs, right here in America, for new, competitive, green power alternatives and power-saving industries.
4. Attack: It'll discourage energy usage.
Answer: Well, yes, if that energy usage is powered by dirty fuels. That's the idea.

Support HR 1337 for a better, cleaner future, and don't reward the financiers who just blew up the economy. We don't need that kind of pollution any more than the Carbon kind.

**** UPDATE ****
For more information, I suggest spending $0.49 on Amazon for
"The Inconvenient Truth About Environmental Cap and-Trade Programs" by Alex Lechich. Mr. Lechich bio describes him as an "environmental scientist for almost twenty years in various government agencies including the US Army Corps of Engineers, US Environmental Protection Agency, US Coast Guard, as well as state and local agencies. He has seen the internal workings of government environmental policies and politics from all of these prisms, and witnessed the interactions with environmental groups and the public in general."

He describes in detail - albeit slightly dated from 2007 - how Cap and Trade has not worked, will not work, and has actually made pollution worse. Of course, as he points out, he was writing during the Environmental Gutting Period of the Bush Administration, when just about any scheme was watered down or purposely misapplied to favor industry and not the environment. Still, he says:
"...a report3 by the Rockefeller Family Fund concluded that though SO2 emissions decreased about 5 million tons nationwide, they actually rose in 16 states. The report noted that of the 600 power plants operating in both 1990 and 2001 that emit sulfur dioxide, 42% actually increased their emissions by 2001. The emissions from the 41 plants evaluated in their report resulted in an estimated 4,800 to 5,600 premature deaths. Of the 41 plants, 31 had increased their emissions and 10 decreased their emissions (by less than 15%) by 2001." (emphasis added)
Fair use does not permit me to quote much more of his paper here, but for anyone interested in this issue, it is well worth the forty-nine cents here for downloading, emailing, and saving to your PC.


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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:

Scott is a former President of Common Ground-NYC (, a Geoist/Georgist activist group. He has written dozens of articles for (more...)

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