Reagan Was NOT For A Carbon Tax

by John McClaughry

In Montpelier, the push for some kind – any kind – of carbon tax is on again. The backers are dredging up all sorts of arguments designed to win support from conservatives. Their favorite is an op ed piece that appeared in the Wall Street Journal of  February 7 from former Reagan State  and Treasury Secretaries George Shultz and James Baker. For what it’s worth – not much now – I used to know them both on a first name basis.

What the Vermont carbon taxers invariably neglect to point out is that the Shultz-Baker carbon tax plan, provides for distribution of the proceeds to “the American people” (who paid for the tax) or “working families” (ditto). It also includes “border adjustment” tariffs on the carbon content of imported products, and the repeal of almost all Federal carbon regulations.

What does that national proposal have to do with a one-state carbon tax in Vermont? Nothing.

Johanna Miller of the Vermont Natural Resources Council tells us that the carbon tax concept is rooted in the logic of a Republican hero, Ronald Reagan, who said  ‘If you want less of something, tax it. If you want more of something, subsidize it.'”

As a Reagan script and speechwriter for five years, I have a fairly good idea of what Reagan said and his thinking behind it. In addition, I voted for Reagan, which I daresay Ms. Miller did not.

Reagan did indeed often say “if you want less of something, tax it.” As President he signed a bill to increase the federal gas tax by a nickel a gallon, not to suppress highway travel, but to refill the highway trust fund.

What he never, ever considered was taxing carbon dioxide emissions, which he had no reason to want less of.

As Rob Roper has cogently pointed out, what taxing carbon dioxide would mean less of, in real world terms, is fuel to heat homes, fuel to get to work, school and church, fuel that tills fields, harvests crops and brings goods to stores and tables. Are these really things we want less of? And for what? To retard global climate change by one sixth of one degree Celsius by 2100, assuming the U.S. and 190 other countries meet their Paris Agreement obligations?

What the carbon tax proposals – all of them – do is open up a huge flow of taxpayer dollars to state government, which it will use as it pleases, never mind those airy promises about quarterly dividends and employee rebates. We know this because the Energy Independent Vermont coalition candidly said so, in its letter to legislators in November 2014: “Based on legislative priorities, carbon tax revenue could of course also be used for other purposes.” (I bet they wish they’d never put that in print.)

John McClaughry is vice president of the Ethan Allen Institute.

{ 1 comment… read it below or add one }

Ron Dreher November 4, 2017 at 1:00 pm

the liberal do gooders do not suggest any replacements for our furnaces, our cars, our wood stoves. what new inventions are there that they are aware of so we can buy a replacement. They promote this carbon tax to reduce the carbon levels in Vermont, which incidentally, is one of 5 states that has lowest level of carbon level out of the 50 nationally. If we allow the liberal democrats to pass this tax, how can anyone afford to live in Vermont. Do the voters realize that each time the oil company fills your tank at home, the tax would add up to $100.00 per delivery. The wage levels in Vermont that range from $8.00 to $15,00 will put many Vermonters in an awkward position, choose oil or food. I think it is time to replace the liberals with some common sense legislators

Ron Dreher
Wells, VT


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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.

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