Sen. Mitt Romney (R-UT) said in a speech on Monday that he is “looking at” and “considering” a massive new carbon tax of “roughly $50 per ton,” an energy tax that would hike taxes by roughly $200 billion in year one and at least $2 trillion in a 10 year window. While Senator Romney stopped short of outright endorsing a carbon tax, his warmness towards the idea should be a cause for alarm to taxpayers.
For context of how radical a $50 per ton carbon tax would be, voters in the deep-blue state of Washington handily rejected a carbon that began at $15 per ton in a 2018 ballot initiative. Perhaps Romney thinks voters just want to be taxed at even higher rates.
In his speech, Romney outlined that this proposal would use 90% of the revenue to issue rebate checks to individuals “affected by the fact that they’re paying more in taxes.” The other 10% would be used to aid individuals in “coal country” and help them “get back on their feet” from the tax’s impact. I’m sure coal country will be relieved to hear a politician promising to pick them up after he kicks them down.
The proposal described by Romney closely mirrors the carbon tax “dividend” legislation introduced earlier this year by Representatives Ted Deutch (D-FL) and Francis Rooney (R-FL). The Deutch-Rooney plan uses the carbon tax revenue to issue rebate checks back to individuals as an attempted offset for rising energy prices faced by consumers.
So let’s take a look at the details of the carbon tax “dividend” plan Romney is considering:
Contains anti-family provisions with children receiving only half of a credit and 18 year olds not counted as adults.
Taken directly from the legislative text:
“(B) PRO-RATA SHARE. —A carbon dividend payment is one pro-rata share for each adult, and half a pro-rata share for each child under 19 years old, of amounts available for the month in the Carbon Dividend Trust Fund.”
Do families spend less money on gas driving their kids to school or practice? Does it cost less money to heat and cool your home if you have more bedrooms? It’s inexplicable why the bill’s sponsors decided families only receive half of a credit per child.
Would cause significant damage to GDP growth.
According to a March report from the Congressional Research Service, a carbon tax and dividend plan set at $50 per metric ton (the same as described by Sen. Romney) would “yield GDP losses each year, ranging from 0.3% to 0.4%.” The report goes on to state that “if one were to add up the annual GDP losses (for example, over a 10-year period) from the lump-sum scenario compared to the baseline scenario, the resulting sum would be much larger.
Retirees will pay more taxes on their social security benefits
A report published by the pro-carbon tax Citizens’ Climate Lobby acknowledges the following:
“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.”
It even imposes income tax on the carbon tax “dividend.”
The rebate checks the government would send back to individuals will count as taxable income. Americans would be forced to pay taxes on apology checks sent by the government for raising taxes in the first place. At tax time, Americans would have to deal with carbon tax paperwork for each member of their family. Here it is straight from the bill’s text:
“(D) FEE TREATMENT OF PAYMENTS. — Amounts paid under this subsection shall be includible in gross income.
A tax on a tax, which will likely increase the complexity of your annual tax filing. Here’s an idea — how about not taking the money from taxpayers in the first place?
Greases the skids for a European-style Value Added Tax, a cash cow for big government by erecting a complex carbon tax border adjustment scheme.
It should be noted again that Sen. Romney did stop short of endorsing a carbon tax. However, his self-stated openness to a multi-trillion dollar tax hike is certainly concerning. Americans for Tax Reform urges Sen. Romney to reconsider his apparent interest in carbon taxes and join the 90 conservative and free-market organizations who oppose ANY form of a carbon tax.