The economists’ statement includes proclamations that could have broad appeal to Republicans. For instance, the group highlights the importance of keeping the tax “revenue neutral” by giving rebates to all Americans, a tactic the economists say will “avoid debates over the size of government.” They also tout the promise that by replacing inefficient “cumbersome regulations” with a carbon tax, the government can “promote economic growth and provide the regulatory certainty companies need for long-term investment in clean-energy alternatives.”
“This is a turning point in Republican climate policy, where the GOP economic brain trust unites behind the Baker-Shultz carbon dividends plan,” said Republican Trent Lott, the former Senate majority leader helping push the proposal.
Many economists have favored a carbon tax as the most effective strategy for discouraging greenhouse gas emissions and combating climate change. But the economists now are going further by stressing that the revenue should be rebated to citizens, instead of being used to reduce the deficit, fund government or pare income taxes.
“For the first time, there’s consensus among economists on what to do with the money, and the answer is to give it back to the American people,” said Ted Halstead, head of the Climate Leadership Council backing the plan.
That approach is key to ensuring it is a progressive tax that ends up helping the poor, instead of just hiking their energy bills. The premise is that periodic dividend checks could more than make up for the hike in costs for poor- and middle-income Americans.
This article provided by Bloomberg News.