Looking for a way to improve the operation of the economy, lower our dependence on foreign oil, reduce pollution, slow global warming, cut government spending, and decrease the long-term budget deficit? Then you should support a carbon tax, which could help the nation address all these issues simultaneously. A new paper I’ve written with Samuel [...]

Two great tastes often taste great together. Chocolate and peanut butter. Oreos and milk. Popcorn and butter. Could the same be true of carbon taxes and corporate tax reform? Done right, each could be flavorful. But would they be even tastier together? My Tax Policy Center colleague Eric Toder and I explore that question in [...]

GOP presidential candidates are blasting President Obama for not lowering the price of gasoline. Rep. Steve Scalise (R-LA) doesn’t stop there. He claims Obama is deliberately driving prices to $4 a gallon. He’s not. But he should.  In an election year, Obama may be the last guy who wants gas prices to rise. However, if  we [...]

A wonderfully-titled new paper—The Tragedy of the Carrots—by Boston College law professor Brian Galle got me thinking about Solyndra, the failed solar panel company that has become something of  a poster child for botched industrial policy. By now, you probably know Solyndra’s sad tale. The firm got $537 million in federal loan guarantees from the [...]

Last week I had the opportunity to testify before two Ways and Means subcommittees–Select Revenue Measures and Oversight–about the way our tax system is used as a tool of energy policy. Here are my opening remarks. You can find my full testimony here. As you know, our tax system is desperately in need of reform. It’s needlessly complex, economically [...]

In a couple of weeks, President Obama will ask Congress to extend this year’s payroll tax cut. It will surely become a classic Washington double-reverse rhetorical moment. I can’t wait to hear Obama lift some of House Speaker John Boehner’s (R-OH) best lines about the folly of raising taxes in the midst of an economic [...]

A majority of Senate Republicans yesterday took a symbolic but hugely important vote to eliminate $6 billion in tax subsidies for the production of ethanol.  And, so far at least, they have not turned into pumpkins. The symbolism of their vote should not be underestimated. In a small but important way, 34 GOP senators proved to [...]

You know the Washington Rule: Liberals will never support spending cuts and conservatives will never back tax increases. Yet, there is one new levy that at least some on the right do support—a carbon tax. Backing for this idea has popped up in some interesting places. Most recently, the American Enterprise Institute included it in a [...]

Now that the House has decided to give away, rather than auction, most CO2 emission permits, I’ve been wondering how Treasury is going to tax this windfall. There is a huge amount of money at stake–by some estimates more than $100 billion-a-year in emissions permits.
Remember, how they would work: Congress would turn the right to emit CO2 into a valuable, saleable asset. Into, one might say, money. The companies that receive these permits—mostly big producers or generators of fossil fuels such as oil refiners or utilities—could either use them for the right to pollute or sell them.

During the presidential campaign, Barack Obama and John McCain profoundly disagreed on many issues, among them climate change legislation and the tax treatment of health care. Now, President Obama seems to be bowing to one of McCain’s poor ideas while resisting one of his better proposals.
It is funny how the politics of these issues is playing out. Many economists agree that McCain had the right idea on health care—the Arizona senator proposed replacing the current exclusion for employer-sponsored insurance with a generous tax credit. Yet, Obama continues to resist (though with increasingly less vigor) any change in the tax treatment of insurance.