Problems with a Carbon Tax


By Peter J. Pitts

While President Donald Trump wants to cut taxes, there are others who hope to raise them -- by taxing carbon.

The idea has long been supported by environmentalists and left-leaning groups, but recently it has found support among some establishment Republicans. The notion is that by taxing carbon, the country would use less, reducing our impact on climate change.

However, there are a number of problems with the plan.

There is no viable alternative to carbon-based fuels. The goal of a carbon tax is to force people to embrace substitutes, but fossil fuels are one of the most inelastic products. There just aren't any viable and scalable alternatives.

If the price of gasoline were to rise significantly because of a carbon tax, some people would carpool or take public transportation, but the vast majority would just have to suck it up and pay the higher price.

The price of everything would rise. Economic theory says that corporations don't pay taxes, people do. Companies pass along taxes to consumers in the form of higher prices.

Because we would still have to use fossil fuels for the vast majority of our travel, transportation and power generation, a carbon tax would simply be priced into virtually every product and service.

Food must be harvested, processed and transported to grocery stores. Clothes and consumer goods must be manufactured and transported to retail outlets or to consumers' homes. Planes, trains and long-haul trucks cannot run on solar or wind power. Neither can our military.

While many power generating plants use renewable energy from wind and solar power, those renewables only make up about 7% of power generation - and that's after throwing hundreds of billions of taxpayer dollars at renewables for decades.

Thus a carbon tax would have little impact on carbon use and a big impact on what we pay for everything.

For example, Norway passed a carbon tax in 1991. They concluded, " the carbon tax effect on emissions was modest. This surprisingly small effect relates to the extensive tax exemptions and relatively inelastic demand in the sectors in which the tax is actually implemented."

Australia became the first country to repeal its carbon tax. When the repeal passed in 2014, Prime Minister Tony Abbot said, "Today the tax that you voted to get rid of is finally gone, a useless destructive tax which damaged jobs, which hurt families' cost of living and which didn't actually help the environment is finally gone," according to the Wall Street Journal.

The challenge of a global economy. We live in a global economy where U.S. companies want to sell to other countries, but they have to be competitive to do so.

That's why corporate income tax reform along the lines of that proposed by President Trump or House Speaker Paul Ryan is so important. A carbon tax that raises the cost of production across the economy will make it harder for businesses to compete globally.

The good news is that the U.S. has been reducing energy-related carbon emissions without a carbon tax. U.S. Energy Information Administration announced last October that energy-related carbon emissions for the first six months of 2016 were down to their lowest level since 1991. That's in large part because fracking has made natural gas a cleaner and more affordable option than coal.

The country needs policies that help the U.S. become more competitive. Lowering the tax burden is the best way to achieve that goal.

Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow at twitter.com/MerrillMatthews.


More Resources


03/29/2024
2024, an Election About Elections
The new poll out from Fox News has a number of intriguing findings.

more info


03/29/2024
The Overlooked Truths About Biden's Age
In terms of optics and in terms of energy, I wish President Biden were younger. There's no point in pretending

more info


03/29/2024
Biden, Obama & Clinton Join Forces in NY
Thursday on the RealClearPolitics radio show (Monday through Friday at 6:00 p.m. EDT on SiriusXM's P.O.T.U.S. Channel 124), Carl Cannon, Tom Bevan and Emily Jashinsky discuss: Joe Lieberman's passing, Bobby Kennedy Jr.'s appeal to voters, the environment of victimization culture, Sam Bankman-Fried's 25-year prison sentence, and James Carville's riff on "preachy" Democrats.

more info


03/29/2024
Meddlers for RFK Jr.
Democrats may get bitten by a tactic they use to great effect in GOP primaries.

more info


03/29/2024
Will RFK Jr.'s Support for Israel Limit His Appeal on Left?
Robert F. Kennedy Jr.'s independent presidential campaign goes to considerable lengths to profess its potential appeal to people across the partisan and ideological landscape.

more info


03/29/2024
Joe Lieberman's Last Words on Israel
A warning to Biden that he risks losing the votes of Jewish Democrats like us.

more info


03/29/2024
A Senator Who Loved To Kibitz
Say what you will about Joe Lieberman, the self-described "Independent Democrat" senator from Connecticut and onetime Democratic vice-presidential candidate. He was many things-honorable, devout, sanctimonious, maddening, and unfailingly warm and decent-all of which have been unpacked since his death yesterday, at 82. He elicited strong reactions, often from Democrats, over his various apostasies to liberal orthodoxy.

more info


03/29/2024
Behind Scenes Stories of Censorship
Dave Rubin of "The Rubin Report" hosts a panel with the winners of the first RealClearPolitics Samizdat Prize -- "Twitter Files" journalist Matt Taibbi, "Great Barrington Declaration" co-author Dr. Jay Bhattacharya, and NY Post reporter and "Laptop From Hell" author Miranda Devine. The three were chosen for their bravery in resisting censorship. They discuss the cost of taking a stand as well as the future of free speech and online discourse.

more info


03/29/2024
Bidenomics Is Making China Angry. That's OK
A persistent theme in Republican campaigning these past few years has been the effort to portray Democrats in general, and

more info


03/29/2024
Biden's Boss Tightens the Screws


more info


03/29/2024
The Fight To Flip the House Just Got Harder for Dems


more info


03/29/2024
In 2024, Digital Is Everything in Politics


more info


03/29/2024
Comer Sums Up His 'Evidence' of Biden Crimes. It's Scant


more info


03/29/2024
WaPo's Lead Liar Waves Away Evidence of Biden Corruption
Glenn Kessler pretended to 'dissect' Rep. James Comer's comments but did not challenge any of the evidence the Republican mentioned.

more info


03/29/2024
Sam Bankman-Fried's Dream Came True


more info



Custom Search

More Politics Articles:

Related Articles

The Interational Fix to Rural America's Healthcare Crisis


Imagine going into cardiac arrest and the closest emergency room is more than 30 miles away. Or suppose your child is struggling with depression, but there isn't a single psychiatrist in your county. Or consider experiencing unexpected pregnancy complications -- yet living hours away from a hospital that has the resources to help.

We Need Health Care Reforms That Help Patients, Families


This summer, we saw remarkable, bipartisan progress on addressing rising health care costs -- an issue voters have consistently ranked as most important.

The Strategic Effect of Operation Kayla


Raids, like Operation Kayla resulting in the death of Abu-Bakr al-Baghdadi and other ISIS terrorist leaders, are usually small affairs with limited results. Nevertheless, such meticulously planned and superbly executed raids also can have significant strategic implications.

Save the Electoral College: The Founders Warned of an "'Overbearing Majority"


An apparent new litmus test has appeared among the 2020 Democratic presidential hopefuls: abolishing the Electoral College.

A Lot Less Bluster and a Little More Sasse


Predictably, the start of Brett Kavanaugh's confirmation hearing to the Supreme Court was an embarrassing fiasco for almost everyone involved. The Republican chair of the Judiciary Committee, Senator Chuck Grassley, had barely begun his opening remarks before Democratic Senator Kamala Harris interrupted to demand the meeting be adjourned, and less than two minutes in protestors started screaming. Protestors continued to interrupt the hearing, which was mostly just senatorial demagoguery on camera anyway, for the next four hours or so. There are many reasons for this: the stakes are high, everything connected with President Trump is radioactive, and the midterms are just two months away. But hours into a series of diatribes from senators on both sides of the aisle, Senator Ben Sasse from Nebraska took a different approach.

Pelosi's Drug Scheme Robs Patients of Tomorrow's New Medicines


The House of Representatives passed Speaker Nancy Pelosi's unprecedented crackdown on the pharmaceutical industry. Her bill, "H.R.3," would allow the government to dictate prices on a broad array of drugs, with the promise of bringing domestic prices closer to those in foreign countries with government-run healthcare systems.

The High Cost of the White House's Drug Pricing Plan


The Trump administration will soon roll out a new plan to slash drug prices.

Are You Tired of Watching America's Natural Landscapes Disappear?


America's population is soaring. Our nation currently houses 330 million people. And each year, that number grows by 2 million. By 2065, more than 440 million people may call the United States home.

End Foreign Freeloading - Don't Import It


Since day one in office, President Trump has been eager to put America first -- even when it has meant upending norms, upsetting political allies, and straining relationships abroad. This eagerness is worth applauding.

Correcting This Faulty Belief About COVID-19 Will Save Lives


In times of emergency, misperceptions can prove deadly. That's certainly the case today, amid widespread belief that COVID-19 mainly threatens older Americans.

Congress Plans to Steal the Coronavirus Vaccine


Lawmakers in Washington want to confiscate the patents on coronavirus treatments and vaccines -- before biotech companies even finish developing them.

We Don't Need an Economic Collapse to Curb Emissions
COVID-19 has caused a worldwide economic collapse. Yet some radical environmentalists are celebrating.

A Little-Known Law Gave Birth to Google -- and Countless Other Inventions


When Google founders Larry Page and Sergey Brin spoke to my colleagues at Stanford's technology licensing office in the late 1990s, other search engines already existed.

Whose Life Doesn't Matter?


I understand and affirm that black lives matter. Some of my dearest friends are black people. I love them and they matter. There are many black people, who I do not know, but they matter just the same.

Trump Administration Ends Pharmacy Coupons When Patients Need Them Most


For chronically ill Americans, the economic damage from COVID-19 could be nearly as life-threatening as the virus itself. More than 40 million workers have filed for unemployment since the beginning of the outbreak. For many, the financial challenges of joblessness have made it harder than ever to afford their insurance companies' medication copays.