Democrat Wants Higher Gas Taxes, New Carbon Fees

July 7, 2008 - 7:32 PM

(CNSNews.com) - Rep. John Dingell (D-Mich.), chairman of the House Energy & Commerce Committee, is proposing a new carbon tax to reduce U.S. energy consumption. Part of the proceeds, he said would help pay for "universal health care -- "upon passage," he noted.

In addition to the carbon tax, Dingell's plan to reduce global warming also includes higher taxes on gasoline; and a phase-out of the mortgage interest deduction on what he called "McMansions."

Dingell, who revealed aspects of the plan earlier this summer (see earlier report), has now summarized it on his website, and he also invited people to comment on the plan.

"The earth is getting warmer and human activities are a large part of the cause," Dingell said. "We need to act in order to prevent a serious problem."

Dingell admits that reducing greenhouse gas emissions will be a "massive undertaking," but he believes higher taxes and fees are "the most effective way" to solve the problem.

Dingell said he would levy an additional 50-cents-a-gallon tax on gasoline, jet fuel, kerosene, to be phased in over five years and then adjusted for inflation.

He said diesel fuel and biofuels that do not contain petroleum would be exempt from the additional tax. (As Cybercast News Service reported, new studies say biofuels may increase global warming.)

As for the McMansion tax, Dingell argues that large homes have contributed to "increased sprawl (more gasoline) and longer commutes." Although new homes are more energy efficient, he admits, their size alone gives them a larger carbon footprint.

Under Dingell's plan, homeowners would receive 85 percent of the mortgage interest deduction for homes between 3000-3199 square feet; a 70 percent deduction for homes 3200-3399 square feet; 55 percent for 3400-3599 square feet; and so on down to no deduction at all for homes of 4200 square feet or larger.

Where will the revenue go?

"First and foremost, the Earned Income Tax Credit will be expanded," Dingell said on his website. He said the higher EIC (a tax refund for poor people who don't pay taxes) will help lower income families compensate for the increased taxes on fuels.

Dingell said the money raised by the higher gasoline tax would go into a highway trust fund, with 40 percent going to mass transit and 60 percent going to roads. (The revenue from the tax on jet fuel would go into the airport and airway trust fund.)

Finally, Dingell said the revenue from his proposed fee on carbon emissions - the carbon tax - would go into the following accounts: Medicare and Social Security; Universal Healthcare (upon passage); State Children's Health Insurance Program; Conservation
Renewable Energy Research and Development; Low Income Home Energy Assistance Program.

The call for higher gasoline taxes, in particular, is not expected to go over well with many Americans, who have complained for months about the high cost of gasoline.

Earlier this summer, House Republican leader John Boehner warned that Democrats would rely on higher taxes for their big-spending plans.

See Earlier Stories:
Republicans: Beware of Tax-and-Spend Democrats (Aug.14, 2007)
Fight Global Warming by Taxing 'McMansions,' Dingell Says (Aug. 10, 2007)
Americans Would Prefer Gov't Regulation to CO2 Tax or Trading, Poll Finds (June 21, 2007)
Carbon Tax Inevitable, Analysts Say (June 6, 2007)
CO2 Tax Could Cut Emissions and Reduce Other Taxes, Economists Say (March 30, 2007)
Gore Outlines Grand Climate Change Plan (March 22, 2007)


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