Can a state fill a budget gap with a price on carbon? Wash. may soon know
“As much as I wish the EPA rule would be done away with … this is really the best way for states to deal with it,” said Lori Sanders, a senior fellow at the R Street Institute. “Whether it’s cutting corporate income taxes or personal income taxes, they can get rid of those and be pricing their carbon externality.” Sanders made it clear, however, that R Street is not in favor of using a carbon tax to plug budget holes, as Washington’s Inslee may recommend next week. “That’s not really our jam,” she said.
And she conceded that Republican-dominated states likely wouldn’t be interested in creating a new tax, no matter what the circumstances are. “I think the states where [a revenue-neutral carbon tax] works are the states that are the right mix of being Republican enough to look for market-oriented solutions, but maybe Democratic enough that the idea of a carbon price doesn’t scare them away.”
