The U.S. needs tax reform

Australia’s Senate, on Thursday, voted to repeal [1] legislation and thereby end its country’s two-year experiment with the carbon tax. The carbon tax, it turned out, cost Australia’s economy about $8.5 billion each year and added approximately $500 to families’ utility bills.

The United States could learn from Australia’s experience. While calls for some kind of carbon tax have always lurked under the surface, they’ve been getting louder and clearer in recent months. And, unsettlingly, more bipartisan.

Former Treasury Secretary under President George Bush, Hank Paulson, called for a carbon tax in June by way of a New York Times op-ed [2]. The Weekly Standard ran a slightly convoluted piece [3] arguing that even though a carbon tax would increase tax bills and product costs, but it would be a small price to pay as a substitute for President Obama’s regulatory machine. Then there are the typical progressive culprits who believe in a carbon tax as one tool for fighting climate change.

Our elected officials need to be focused on tax reform, not adding more taxes to the books. As it currently stands, the federal tax code is unfair and imbalanced. It’s a complicated web filled with loopholes that seem to help and benefit only a small slice of the population. Middle-class Americans are struggling every day. The last thing they need is a tax that causes their power bills to skyrocket.

If our politicians try to ram a carbon tax through, they do so at their own peril. We’ll be watching.