Washington State voters are considering a carbon tax. The proceeds would be used to offset other taxes, making it revenue neutral. This could be a national model, if we weren’t all so allergic to the word tax.
The proposal is strikingly simple and refreshingly bipartisan. According to Yes on I-732.org, I-732 would:
- Directly address climate change by adding a tax of $25/ton on carbon emissions;
- Reduce the statewide sales tax by 1%;
- Add a tax credit of $1500/year for low-income households; and
- Lower the Business and Occupation (B&O) tax on manufacturers to .001%.
This type of fossil fuel tax would be first of its kind in the United States, though it has been implemented elsewhere. According to the World Bank, 15 countries currently tax carbon. Sweden’s policy is the most aggressive, at rate of $168/ton. Closer to home, a carbon tax has been in place in British Columbia, Canada, since 2008, which has resulted in a 5-15% reduction in greenhouse gas (GHG) emissions. BC’s tax is much lower than Sweden’s, at a rate of $30/ton.