carbon tax proposal


Staff member
Apr 20, 2007
The Golden State
The MARKET CHOICE Act (MCA) was introduced by Rep. Carlos Curbelo (R-FL) on July 23, 2018. The legislation would eliminate the federal excise tax on gasoline and diesel fuel (the “gas tax”), in favor of a tax on GHG emissions, i.e., a carbon tax, levied on fossil fuels and certain industrial facilities and products.
A proposal to shift the tax from motor fuel only to all carbon emissions. What do you think about this one?
The gas tax makes sense as a way of addressing roads costs. A carbon tax makes no sense.
I understand that improved fuel efficiency has had an impact on things but a myth based tax is not the answer.
I am skeptical and I question how this really makes anyone any better off.

The analysis you posted states:
A carbon tax based on combustion emissions will increase commodity prices. Using Resources for the Future’s Carbon Price Fuel Calculator, this new tax would add about $0.23 per gallon of gasoline, $1.39 per 1,000 cubic feet of natural gas, and $55.09 per short ton of coal. Benchmarked to 2015 prices, such increments would represent price increases of 12, 33, and 173 percent for each commodity, according to the RFF calculator. (emphasis mine)

By eliminating the gas tax, the tax swap will significantly reduce the price impacts of the GHG tax on gasoline at the pump. Directly subtracting the savings on the gas tax from the increase in the carbon tax indicates that the price increase at the pump will be 5 cents per gallon.

It seems the impact to consumers, no matter how you slice it, is you will pay more. How does it benefit a consumer if you eliminate the federal gas tax - but cause the total price of gasoline to go up anyway? The consumer pays more. How does it benefit the consumer if you raise gasoline prices and then also add huge additional taxes to things like natural gas, coal etc. More than a "tax swap" this appears to be a massive tax hike which means consumers must pay more not only for gas, but for electricity, heating, etc etc etc.

I get they are trying to hide behind "infrastructure" investment here - but even the analysis you posted shows that of the roughly trillion dollars they would expect to tax over the next decade under this plan - 160 billion of it would need to be spent on subsidies for low income people who would get even further crushed by the massive price hikes they would see on energy costs etc.

I am always skeptical when politicians make a "market force" argument that really just mask that this at its core is using the power of government to coerce the market to do what they want. I have no problem wanting to reduce GHG emissions etc - but don't sit here tax into oblivion the alternative and then say "look - the market is dictating that it is time for alternatives!"

In short - I'll do more research on the issue - but I don't like it so far.

Politically speaking - I'd be shocked to see this move in the House (unless leadership changes). Recall that H Con Resolution 119 (by Scalise) stating that a "carbon tax" would be detrimental to the US economy passed with 229 votes (only 6 Republicans opposed it - including both authors of this legislation). I don't think the support will be there in the caucus for this to move.
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a carbon tax might lessen the impact of global warming as seen in Europe recently
Have done little more research on this....the idea still is horrible.
the countries that suffer worst in the heat have done little to combat global warming, summers are getting warming each year