How the Debt Ceiling Deal Might Pave the Way for a Carbon Tax


What does the debt ceiling deal worked out this week mean for future climate change legislation? It’s no secret that cap-and-trade is dead in the proverbial water. The Center for American Progress (CAP) thinks that the debt ceiling deal “warmed up hopes for a carbon tax.” The reason is simple: the deal excluded revenue increases and tax code reforms which “means a grand bargain is still on the table.” CAP believes that Democrats will insist on revenue increases as part of the post elections debt ceiling deal.

In addition, Obama will have “have maximal leverage right after the 2012 election when the Bush tax cuts are poised to expire if no positive action is taken,” as a CAP post put it. Obama could trade the Bush tax cuts and the corporate tax rate reduction for a carbon tax.

When asked about a carbon tax during a 2007 interview with Grist, President Obama said, “a carbon tax accomplishes much of the same thing that a cap-and-trade program accomplishes.” However, he went on to say that one of the mistakes in the European Union system is that the “too many of those permits” are given away. “So as I roll out my proposals for a cap-and-trade system, I will price permits so that it has much of the same effect as a carbon tax.”

Not sure if a carbon tax will really reduce greenhouse gas emissions? Look at Sweden, which enacted a carbon tax in 1991. In 2009, Sweden’s greenhouse gas emissions were 17 percent below 1990 levels. The annual GDP growth rate in 2010 was 5.5 percent.

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Photo credit: jenorton


Gina H.
Gina H6 years ago

I'm all for cleaning up the air and the environment. I'm not sure how a new carbon tax is going to stop polluters from continuing their assault on all of us. It would be lovely if these same companies didn't own our government. I wonder if this is just another political ruse to make it APPEAR as though some politicians are doing something to stop pollution and clean it up. I see a few people making better salaries on these funds while actual monies to pay for prevention and cleanup are minimal. Meanwhile, the pollution continues to grow while more trees are felled for paper for laws that have as much bite as a toothless Chihuahua.

Walter Askins
Walter Askins6 years ago

The recent research does not support the UN conception of global warming. Carbon taxes for something that a present looks very doubtful to be true is not to bright. If you look at the individuals (like Al Gore) it looks a lot like a money scam. I do not know maybe we should have them and give Al Gore billions of dollars which he has positioned himself to receive if this were to go through. I am sure everyone knows that Gore is the controlling share holder of OXY petroleum the forth largest oil company in the US. Just a side note he also bought an 8,000,000 dollar beach house Along the California Coast. Hmm sea level rise supposive extreme weather, maybe he knows something we don't or maybe it is a scam, after all he has spent 300,000,000 dollars to convince us. Let not forget the polar bears whose drown opps that's right the scientist involved in that study has been called up on ethics charges due to his study being false.
Carbon tax money are an awful idea. If you have a car get taxed, if you have children get taxed, if you have a garden get taxed, a dog, a cat, compost pile, etc...
our government in the last several years tried to ram through legislation that would do things like have EPA inspectors in every home, and fine you if you do not comply. Can we say by a new furnace, dish washer, dryer, TV. ETC....
The whole Idea of carbon taxes was created by Ken Lay of Enron (yes the one who went to jail and died there). He was a close friend of Al Gore. Gore t

Grace Adams
Grace Adams6 years ago

Even if you do NOT believe than human activity contributes to global warming at all--a carbon tax is at least no dumber than the excise tax we used to have on long distance phone calls from shortly after World War II until around 1980 on the grounds that long distance phone calls were a luxury.

Ameer T.
Ameer T6 years ago

i urge everyone to see the documentary "Fall of the Republic" it answers a lot of your questions about the global warming and carbon tax plans.

Carbon tax is essentially a tax on breathing for the individual. And with the debt ceiling maturing soon, a new form of tax would be needed to milk the people adn keep the government afloat.

Ruth R.
Ruth R6 years ago

"Not sure if a carbon tax will really reduce greenhouse gas emissions? Look at Sweden, which enacted a carbon tax in 1991. In 2009, Sweden’s greenhouse gas emissions were 17 percent below 1990 levels. The annual GDP growth rate in 2010 was 5.5 percent."
Read more:

That's a start for less carbon emissions and most of it probably for cleaner air and living too.

Ernest R.
Ernest R6 years ago

@ Steve R----Good for you that you don’t mind the contaminated air, the Gulf of Mexico destruction, the ongoing oil spills that a "dumb" carbon tax would offset. I would mention that Sweden provides full medical care, including dental. When I worked there I had one of the poorer paid jobs. {goldsmith}, It was necessary for a goldsmith’s wife to also have a job. Of course that wouldn’t be necessary in the low or no tax US, would it ?

Steve R.
Steve R6 years ago

I wouldn't be so quick to use Sweden as an example!

Do you know what the tax rate is in Sweden?

Individual Tax - 28.89%–59.09%
Payroll Tax - 31.42%
VAT - 25%

Compare to Corporate Tax - 26.3%

So who is being taxed hardest in Sweden?

No thanks! I like America just fine! Without a dumb "carbon tax"!

Beverly G.
bev g6 years ago

yeh shudd ahad it years ago.

Linda T.
Linda T6 years ago

The Debt Ceiling Deal was just another Raw Deal for the hard working people in this country.

Grace Adams
Grace Adams6 years ago

Business would quibble about the rate, but most likely would find excise taxes on all forms of pollution a lesser evil than the equivalent in non-tariff regulatory burden.