| Abstrakt: |
Some of these international jurisdictions could be especially promising opportunities for emission reductions because their value added tax rates are much higher than state sales tax rates in the United States, meaning that the revenue-equivalent carbon tax rate would likely be higher. Initiative 732 (I-732) was revenue-neutral, meaning that money from the carbon tax was offset by tax reductions elsewhere, principally a reduction in the regressive state sales tax, but also an Earned Income Tax Credit match for low-income working families, plus business tax cuts for manufacturers to help them stay competitive. Fourth, state tax data show that the amount of revenue generated by taxes on electricity (about 2 percent of total state revenue) is equal to or less than the revenue that would be generated from imposing sales taxes on groceries, so budget-based opposition to a Climate Action Tax Cut should logically lead to opposition to sales tax exemptions for groceries. This commentary describes one such opportunity: the Climate Action Tax Cut, a policy that can work in many US states, some municipalities, and at the national level in countries that levy Value Added Tax (VAT) on residential electricity consumption. [Extracted from the article] |
