Issues & Insights

Despite What Biden & Co. Say, There Is No Such Thing As A Revenue-Neutral Carbon Tax

Photo: Sikander Iqbal, licensed under the Creative Commons Attribution-Share Alike 4.0 International license.

Joe Biden is a climate change true believer, stating repeatedly human fossil fuel use is undeniably causing catastrophic climate change, which poses an existential threat to human existence. The names Biden has floated for his Cabinet picks and key appointees, such as Janet Yellen for Treasury secretary, Anthony Blinken as secretary of State, and former Secretary of State John Kerry as his special envoy on climate, reflects his commitment to imposing drastic policies to fight climate change

As with fanatics, true believers, and zealots throughout history, the fact that data indicate he and his appointees are wrong – climate change, while occurring is not catastrophic – does nothing to dissuade them from their blind faith that apocalyptic anthropogenic climate change must be stopped at all costs.

Nor does the fact that Biden and friend’s lifestyles — multimillionaires with multiple homes, multiple cars, yachts, and private jets — don’t actually reflect their purported fear that large carbon footprints are dooming the world, apparently bother them. There is a fundamental disconnect between their professed fear of a climate change disaster, and how they live their lives. Climate hypocrisy is the modus operandi of the Biden administration.

Among the policies Biden and company have embraced for years to fight climate change is taxing carbon dioxide emissions, in short, a carbon tax. Sadly, a number of old mossback, Rockefeller Republicans have also embraced the myth of the carbon dioxide tax. While they profess the carbon tax is a way to fight climate change, in reality it is, as so many policies are, simply another way for elites to accrue more power for themselves, exerting ever greater control over the lives of the common folk — the hoi polloi, Joe and Jane six-pack – whom they disdain.

After all, these folks are stubbornly clinging to their God, guns, pickup trucks, and modern conveniences like air conditioning, refrigerators, and on-demand electric power, to the world’s detriment. Biden and company say, “trust us, we’re from the government and we know best how you should live.”

Because polls consistently show a majority of people, although concerned about climate change, oppose paying more for their electricity and gasoline in an effort to fight it. The carbon tax most often floated by American elites is one which they refer to as revenue neutral. The problem is, a revenue neutral carbon tax, like Bigfoot, is a myth. As fantastical as dragons, unicorns, and even catastrophic human-caused climate change itself.

In the past, my colleague James Taylor has persuasively written that no carbon dioxide tax is revenue neutral for the households being taxed. A carbon dioxide tax raises the price of coal, natural gas, and gasoline in an attempt to incentivize consumers to purchase more expensive wind power, solar power, and electric vehicles.

Although consumers will spend substantially more money on energy and energy-related bills, the wind and solar industries will pay no carbon dioxide taxes. Indeed, the tax revenue generated by a “successful” carbon dioxide tax — one that significantly reduces carbon dioxide emissions — will decline sharply over time, leaving little money to return to the people. Thus, although government would not receive much revenue to return to consumers from the tax, people, now paying substantially more for energy, would face a dramatic decline in their discretionary household incomes.

Nor, in truth, could any carbon dioxide tax be truly neutral in terms of government revenue.

Even if Congress and the president keep their hands out of the till, not finding creative ways to spend whatever new revenue a carbon dioxide tax generates — like diverting the revenue to politically connected crony capitalists pushing big wind and solar projects, as environmentalists have demanded in past carbon tax proposals — and returns it through some scheme to the people being taxed, it’s simply a fact a good portion of the revenue generated by the tax will be diverted to the bureaucracies that collect and disburse the tax checks. No government program is cost-free.

New employees will have to be hired, or existing federal government workers will have to divert their time from other responsibilities, to account for the carbon dioxide taxes to be paid, assure that they are paid, to police the program to prevent cheating and fraud, and to send out the revenue checks and handle complaints when disputes arise.

These and other costs will eat up billions of dollars each year. Unless these costs are paid directly out of the carbon dioxide tax revenues — in which case all the revenues will not be returned to taxpayers as promised — then the government will have to impose other taxes or take on additional debt to pay for the program. So much for revenue neutrality.

Should electors finally declare Biden the next president of the United States, remember when he and his cronies tell you paying a new tax will be good for you, they are lying. A carbon tax won’t save the earth, but it will make average people poorer. No kind of creative accounting can change that fact.

H. Sterling Burnett, Ph.D. (hburnett@heartland.org) is a senior fellow on energy and the environment at The Heartland Institute, a nonpartisan, nonprofit research center headquartered in Arlington Heights, Illinois.

Will You Help Us In The Fight For Free Speech?

Issues & Insights was founded by seasoned journalists of the IBD Editorials page. Our mission is to provide timely, fact-based reporting and deeply informed analysis on the news of the day -- without fear or favor.

We’re doing this on a voluntary basis because we believe in a free press, and because we aren't afraid to tell the truth, even if it means being targeted by the left. Revenue from ads on the site help, but your support will truly make a difference in keeping our mission going. If you like what you see, feel free to visit our Donations Page by clicking here. And be sure to tell your friends!

You can also subscribe to I&I: It's free!

Just enter your email address below to get started.

Share

About Issues & Insights

Issues & Insights is run by the seasoned journalists behind the legendary IBD Editorials page. Our goal is to bring our decades of combined journalism experience to help readers understand the top issues of the day. We’re doing this on a voluntary basis, because we believe the nation needs the kind of cogent, rational, data-driven, fact-based commentary that we can provide. 

We Could Use Your Help

Will you help us fight for honesty in journalism and against the tyranny of the left? Issues & Insights is published by a team of volunteers who believe in free speech and in quality journalism. If you like what you see, leave a donation by clicking on the Tip Jar above. You can also set up regular donations if you like. Ad revenue helps, but your support will truly make a difference. (Please note that we are not set up as a charitable organization, so donations aren't tax deductible.) Thank you!

Subscribe to Issues & Insights via Email

Enter your email address to subscribe to I&I and you can receive notifications of new articles in your email. It’s simple, and free.

Join 4,920 other subscribers

%d bloggers like this: