Carbon Tax Regressive And Damaging: “Nearly 2 Million Fewer Jobs and $500 Billion Less GDP Growth, by 2030.”
James Valvo, Director of Policy at Americans for Prosperity, recently wrote; “Carbon Tax Regressive And Damaging”
I don’t think the question should be, is Washington ready for a carbon tax, it should be is the American economy ready for a carbon tax? The answer to that question is a resounding no.
A carbon tax is one of the most regressive and damaging taxes Congress could propose, driving up the cost of energy, manufactured goods, and anything that is transported to market.
The harshest impacts of these price spikes would fall on those least able to cope. CBO recognized as much recently with their working paper discussing how to offset the higher costs on low-income households. The biggest takeaway from CBO’s analysis is that a carbon tax is not a free-standing policy; it must be coupled with massive new redistributions of income to adjust for the blow a carbon tax would deal to certain individuals. Some of these redistributions would be triggered automatically, like the Social Security COLA and SNAP. However, some would need to be legislated, like a beefed-up EITC or LIHEAP.
Even an increased dependency on government wouldn’t fully shield the economy from a carbon tax’s impact. The impact studies from earlier cap-and-trade proposals detail the job losses and reduced growth that carbon taxes would usher in. The ACCF-NAM study showed that the country would see nearly 2 million fewer jobs and approximately $500 billion less GDP growth, by 2030.
President Obama recognizes as much and following his first term’s deviation from economic revival down the health care and financial regulation rabbit holes, he appears hesitant to do it again. At his recent press conference, the President said: “If the message is somehow we’re going to ignore jobs and growth simply to address climate change, I don’t think anybody’s going to go for that. I won’t go for that.” He later added, “We’re still trying to debate whether we can just make sure that middle-class families don’t get a tax hike. Let’s see if we can resolve that. That should be easy.” But of course a carbon tax would be a massive tax hike on all Americans.
The President is right: Rejecting a carbon tax and its impact on the economy “should be easy.”
He’s absolutely right “The impact studies from earlier cap-and-trade proposals detail the job losses and reduced growth that carbon taxes would usher in. The ACCF-NAM study showed that the country would see nearly 2 million fewer jobs and approximately $500 billion less GDP growth, by 2030.”
Here’s the study: