Joe Biden will likely implement a “very high” carbon tax in the United States, according to a member of a Biden advisory committee on trade. Such a carbon tax could approach nearly a $2 trillion tax hike, according to estimates. Biden himself is on record in support of a carbon tax.
“There is, pending in the United States, significant legislation that I think is likely to gain support from a Biden administration to impose a carbon tax in the United States that would also have as part of it an import border adjustment as well as an export rebate," Jennifer Hillman, a former World Trade Organization judge and member of the Biden campaign’s external advisory committee on trade, said while participating in a virtual event hosted by Politico.
Hillman, who is a reported frontrunner for the position of U.S. Trade Representative in a Biden administration, confirmed her role as an advisor to the Biden campaign during the event and noted that Biden’s carbon tax would be imposed at a high level and in a more direct form of taxation than European models.
“Different from the European system, it would be a straight-up tax on carbon. The most likely one is going to be one that taxes well-head/mine-mouth - meaning it taxes the carbon as it comes out of the ground, so you'd be taxing coal, oil, and natural gas as it comes out of the ground. A very high tax,” said Hillman.
Hillman continued by comparing the Biden plan’s similarity to a Value-Added Tax (VAT) that would be paid by all Americans.
“The presumption is [the tax] then passes through the rest of the economy so everyone then pays as it gets passed along. Kind of like a Value Added Tax, but this is a carbon-added tax that passes along, with a border adjustment, meaning a tax on imports and an export rebate,” said Hillman. “That is, at least, a very real possibility coming out of the United States when we have a different administration.”
Politico’s Morning Energy newsletter noted that the carbon tax Hillman described bore a striking resemblance to legislation introduced in 2018 by Rep. Earl Blumenauer (D-Ore.) that imposes an initial carbon tax of $50 per metric ton and increases each subsequent year based upon emission levels.
According to estimates from the Tax Foundation, a carbon tax starting at $50 per metric ton would increase taxes by roughly $1.87 trillion in a ten-year window.
Biden has made clear his support for a carbon tax during his presidential campaign. Previously, in a CNN town hall with Anderson Cooper, Biden stated his support for a carbon tax.