Swap Gas Tax for Carbon Tax?

Legislation would raise revenue to support Highway Trust Fund

WASHINGTON -- An upcoming bill from a Republican congressman would eliminate the federal gasoline tax in exchange for introducing a carbon tax.

Rep. Carlos Curbelo (R) of Florida plans to introduce The Market Choice Act the week of July 23. According to an early June draft of the legislation obtained by E&E News, the legislation would end the federal gasoline tax, which has sat at 18.4 cents per gallon (CPG) since 1993, and add a $23-per-metric-ton tax on carbon dioxide emissions from entities including refineries, ethanol and biodiesel producers and importers, and gas processing plants.

Seventy percent of the revenue from the carbon tax would feed the Highway Trust Fund, while 10% would support state grants for low-income households. An additional 5% would go to states, cities and tribes for projects related to coastal flooding. About 0.1% would go to the Leaking Underground Storage Tank (LUST) trust fund. 

The tax would increase 2% above inflation each year. Its projected goals would be a 24% cut in emissions from 2005 levels by 2020, ratcheting up to a 30% reduction by 2032. Emissions from the taxed entities would be reported annually; if they are not cumulatively meeting these targets, the tax would increase automatically by $2 per ton every two years. There would also be a moratorium on enforcing Clean Air Act greenhouse-gas emission regulations from stationary sources that are also covered under the carbon tax, lasting as long as emissions goals were being met and ultimately ending in 2033.

Curbelo declined to discuss details of the legislation, beyond citing its focus on “regulatory reform,” infrastructure investment and flooding adaptation.

"It really attempts to capture the political energy of the moment," Curbelo told E&E News. "We know that infrastructure investment is highly popular in our country."

The House bill does not yet have a Senate counterpart, Curbelo told E&E News, although he expects it to "get people's attention."

"This bill, we've put months and months into it and have taken it around to a lot of experts and groups and corporations. We have high hopes for it," Curbelo said. "That doesn't mean it gets passed this Congress, but it means we really think it could be a good base for bipartisan cooperation on this issue."

The bill is being introduced at the same time the House is set to vote on a nonbinding resolution against carbon taxes, The Hill reported. Reps. Steve Scalise (R) of Louisiana and David McKinley (R) of West Virginia are sponsoring the resolution, which would denounce a tax on carbon dioxide emissions as “detrimental to American families and businesses, and is not in the best interest of the United States.”

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