How to Tax Carbon
Conservatives can fight climate change without growing government.
Rather than acknowledge climate change as a major public-policy issue and draft a serious proposal to deal with it””to counter the left’s plan to expand dramatically the size, scope, and cost of the federal government””the right has too long pursued a course of obstructionism that amounts to little more than political theatre.
....The best policy to address greenhouse gas emissions, while adhering to conservative principles, is a carbon tax combined with tax and regulatory reform. Merely uttering the phrase “carbon tax” strikes fear into the heart of many on the right. This is understandable, to the extent that what conservatives actually fear is a plan that would layer energy taxes on top of the overly burdensome tax and regulatory regime we already have.
But one need not engage in climate alarmism or capitulate to big government to make a case for a revenue-neutral carbon tax. In fact, President Obama’s recent speech helps illustrate why the right needs to consider one more seriously.
A conservative carbon tax has three key components: revenue neutrality, elimination of existing taxes, and regulatory reform. When combined, these policies would yield a smaller, less powerful government; a tax code more conducive to investment and growth; and the emissions reductions the law says we must achieve.
The first and arguably most important component is absolute, bona fide revenue neutrality. The federal government is already too large and expensive. Conservatives routinely oppose efforts by the left to raise revenue in order to shore up lavish spending and broken entitlement programs. A carbon tax should no more be used to fund bigger government than any other tax. Every single dollar raised by a carbon tax must be devoted to tax reductions elsewhere in the code.