Laura Seitz, Deseret News
Low-income households could be hit hardest of all if America's potential solution for improving the economy becomes law, according to a Brookings report.
A carbon tax, which, unlike most taxes, is favored by economists, could raise the GDP by 1 percent. In addition to increased revenue, proponents say this tax could reduce greenhouse gas emissions by 14 percent and cut Americans' dependence on foreign oil.
For households with low-incomes, most of their earnings go toward consumption. This would tax a larger percent of their income than other financial classes. However, these negative implications could be offset through refundable tax credits or payroll tax credits, according to the report.
Economists support the carbon tax because they say it corrects market failures and can make the economy more efficient. It places the tax burden on consumers of energy, which in turn lowers the consumption of fossil fuels.
Although the United States has never had a tax like this, it’s been implemented in Scandinavian countries, the Netherlands, Germany, United Kingdom and Australia. In Europe, the Brookings report says the tax significantly reduced emissions.
- 10 celebrity couples who have made marriage work
- Freelancers and millennials help usher in the...
- 15 jobs that are safe from the robot takeover
- 13 ways Disney could use drones at its parks
- 10 jobs you can get right now
- 10 things to know about corporate inversions
- As stocks rise, so does anxiety: Time to get...
- 3 ways insurers can still avoid covering the...
- 10 things to know about corporate... 32
- 3 ways insurers can still avoid... 13
- It's about time the government... 12
- Freelancers and millennials help usher... 8
- Cantwell targets small business loan... 4
- Applications for US unemployment aid... 4
- US consumer spending dips 0.1 percent 1
- 6 financial moves to prevent sleepless... 1