What’s seemingly an effective way to reduce the deficit while helping the economy, yet at second glance is a way to further empower spending addictions and bind a struggling recovery?
I’ll give you a hint: It starts with “carbon” and ends with “tax.”
In an insightful Forbes op-ed, Andrew Quinlan – cofounder of the Center for American Freedom and Prosperity – shares deeper insights as to why the carbon tax may not have the fiscal or economic impacts that proponents are using to advance the tax in Congress.
The carbon tax has been pushed as a way to lower carbon emissions by 80 percent over the next 42 years and an alternative to cap and trade, a measure that has little political support in today’s legislative debate.
Some on the Right have come out in support of the tax, if it is done to be revenue neutral and therefore could help drastically reduce income taxes. This idea, Quinlan argues, is shortsighted, as he believes any tax reductions offered for the carbon tax would be overturned in later years by future Congresses. Quinlan’s suspicions seem well-grounded: in the best case scenario that taxes were actually lowered enough to offset the carbon tax revenue, Congress would likely find some reason to justify allowing it to creep back up.
Finally, at a time when the nation is attempting to increase production and spur a stagnant economy, it makes little sense to implement a tax on production. Congress must prove it is out to help businesses succeed. The way to do that is by addressing tax uncertainty and our fiscal crisis, not by threatening businesses with another tax.