Carbon tax: The idea no leader proposes but that won’t die

McClatchy Newspapers
Nov. 20, 2012

The president downplays it. Insiders insist it doesn’t stand a chance. Yet as negotiations between the Obama administration and Congress take form over a deal on taxes and budgets, the idea of a carbon tax is discussed with greater frequency.

Oddly enough, there’s no high-profile leader out there championing a carbon tax, yet it’s the subject of reports, conferences and a flurry of maneuvers by groups for and against it...

The idea of raising revenue from a carbon tax to protect the environment and to lower budget deficits and the national debt isn’t farfetched. It almost made it into a widely praised deficit-reduction proposal from the Bipartisan Policy Center, a research organization that’s home to former lawmakers and top staffers.

The center crafted its November 2010 blueprint called “Restoring America’s Future” to provide a path for lawmakers who want to get the nation’s fiscal house in order. The carbon tax was removed only at the end of the group’s internal discussions.

“We had a majority of votes in favor of a carbon tax. At the last moment, we couldn’t get the unanimity,” said Steve Bell, a former chief counsel to the Senate Budget Committee who’s now the economic policy director for the center.

The problem? The center’s road map also called for a temporary national sales tax, and members didn’t want to have two new taxes.

A carbon tax could raise $1 trillion over 10 years without touching income taxes, according to the nonpartisan Congressional Budget Office. That makes it an attractive source of new cash, and the reason Bell thinks it may still be on the table even if no one is saying so.

“It’s been alive. It’s like a cat: It’s had nine lives. It’s back again,” Bell said. “I would not be surprised to see a serious attempt to get that in.”