The race against global warming has experts searching for solutions to offset rapid change in our environment. One such proposal: a carbon tax.
The idea behind a carbon tax is really quite simple. Working like a sales tax, individuals and businesses would pay a tax based on the amount of carbon emissions they produce. The plan is that the extra tax would be an incentive to pollute less and to seek out clean energy alternatives.
Proponents of the tax say that putting a cost on the harmful greenhouse gas is the only way to send the appropriate message to Americans about the state of the climate crisis. By hitting businesses and consumers in their pocketbooks, especially the affluent who contribute the most, tax proponents hope to encourage energy conservation and lesson U.S. dependency on oil.
However, not everyone is on board with this new plan.
Skeptics argue that a tax on energy use would hurt the poor and middle class the most. Since introducing a new tax always draws opposition, backers of the carbon tax suggest tax shifting, a concept that would lesson the burden of other taxes and offer rebates to those with financial hardship. The idea is to target the wealthy who consume up to four times as much fuel, gasoline, and energy as the poor.
Another criticism of the carbon tax is that raising prices will destroy the economy. By making it more expensive to travel, heat and cool homes and commute to work, Americans will have less money to spend on other consumer goods. Plus, if companies are forced to pay more towards production, they may cut wages or other benefits to compensate. Also, if the price of American-made goods goes up, people will look overseas for more affordable products, driving U.S. goods out of the marketplace.
But not necessarily so, says those who favor the tax. According to the Carbon Tax Center, gas prices rose an average of 14% annually from 2003-2006. During this time the economy still grew 3.5% each year. The proposed tax would only increase gasoline prices between 5-10% per annum, with that percentage hopefully shrinking as non-fossil energy becomes available. Also, as far as the marketplace is concerned, proponents insist that increased production prices will encourage innovations in clean and efficient technology and reduce our dependency on foreign oil supplies, the justification behind costly military expenditures. Cleaner practices will also promote like-minding thinking in growing nations with high carbon dioxide emissions such as China and India.
Many economists like the idea of carbon tax and believe it could be successful in lowering U.S. emissions while being fairly easy to administer. However, getting the proposal passed will be the real challenge as Republicans and Democrats butt heads in the House and Senate.
