Tonight Democrat presidential candidate Pete Buttigieg repeated his desire to impose a carbon tax.
“First of all, it’s one of the reasons why I propose we assess a carbon tax. I know you’re not supposed to use the ‘T’ word when you’re in politics, but we might as well call it what it is,” Buttigieg said during a CNN town hall.
Buttigieg also called for a carbon tax, during a June debate.
“We need to do a carbon tax and dividend, but I would propose we do it in a way that is rebated out to the American people in a progressive fashion so that most Americans are made more than whole,” Buttigieg said in Miami.
Buttigieg’s carbon tax plan is a large tax increase that would give Congress power to raise taxes automatically each year without having to vote. It would require a large bureaucracy to implement and run.
Such a carbon tax would also impose severe tax increases on Social Security recipients.
Because the Buttigieg carbon tax would significantly increase household costs — cooling and heating, transportation, groceries, etc. — the bill directs the federal government to send payments to households in an attempt to compensate for the increased cost burden.
But these payments, called “dividends” by Buttigieg — are subject to federal income tax. The tax will not only siphon money from households to be sent to Washington — it will also impact Social Security benefits.
A report published by the pro-carbon tax Citizens’ Climate Lobby acknowledges the following:
“Taxability of Dividends raises three separate issues: (i) additional complexity for taxpayers; (ii) the equity of the disparate effective marginal tax rates on taxable Dividends for various residents; and (iii) the method or methods by which those taxes would be paid.”
Regarding Social Security recipients, the report states:
“Over the income-related phase-in range for the taxation of social security benefits, each additional $1.00 of non-social security income causes an additional $0.50 or $0.85 of social security benefits to become taxable. In most situations, the ordinary income tax rate in the phase-in range is 10 percent; however, at some income levels, the rate is 12 percent. Thus, $1.00 of non-social security income — including income from the Dividend — will be taxed at effective marginal rates of 15 percent, 18 percent, or 22.2 percent.“
The report gives an example of how the tax would hit a typical couple over age 65 with an income of $38,000 and a Social Security benefit of $12,000:
“Based on that income, the tax rate schedule shows that their marginal tax rate would be 10 percent. However, the addition of $1,584 of taxable Dividends from the Carbon Fee causes more of their social security benefits to become taxable, and their marginal tax rate due to the Dividends is 20.12 percent, so that after paying their income tax, the couple is left with only 79.88 percent of their gross Dividend.”
It’s no wonder voters consistently reject carbon taxes at the ballot box, even in blue states. https://www.atr.org/carbon-tax-toxic-ballot-box-timeline