This year, voters in Washington state will get the chance to enact the first state carbon tax. To provide a good example for other states, they should adopt a policy with the broadest bipartisan appeal: a revenue-neutral tax.
Carbon Washington, an organization that has gathered 350,000 signatures to put a $25-per-ton carbon tax to a vote, has long favored the revenue-neutral approach. Its measure would return the money raised through the carbon tax by cutting income and corporate taxes.
Unfortunately, many left-leaning carbon-tax supporters feel strongly that the revenue should be used to make new investments in clean energy, education and other social programs.
That approach undercuts one of the most powerful arguments in favor of a carbon tax: that climate change is everyone’s problem, regardless of political philosophy. This means the effort to lower greenhouse-gas emissions should be undertaken in the least partisan manner possible. Putting a price on carbon can encourage energy efficiency and the use of cleaner fuels, but do it without getting sucked into the eternal debate over the proper size and scope of government.
A revenue-neutral carbon tax would sidestep that controversy and focus on one essential goal: cutting emissions.
A second advantage would be transparency. If revenue from a carbon tax were used to enable other tax cuts, politicians would have less opportunity to reward favored constituencies. That would help assure voters that the higher prices they’d have to pay for electricity, gasoline and home-heating fuel were working to fight climate change, not to play politics.
Washington’s legislature will soon decide whether to pass the revenue-neutral tax or put it on the November ballot — possibly alongside an alternative carbon tax that would expand the state budget. In that event, voters should stick with the original version and support the broader fight against climate change.
FROM AN EDITORIAL ON BLOOMBERG VIEW