Bill Overview
Title: Carbon Reduction and Tax Credit Act
Description: This bill imposes an excise tax on coal mines or oil or gas wells equal to $50 per ton of carbon contained in fuel produced at such mines or wells located in the United States, or entered into the United States for consumption, use, or warehousing. It also allows an individual taxpayer (other than a nonresident alien) a refundable income tax credit equal to $1,000, subject to a phaseout if the taxpayer's adjusted gross income exceeds a certain threshold amount. The dollar amounts in this bill are subject to a inflation adjustment in calendar years after 2023.
Sponsors: Rep. Maloney, Sean Patrick [D-NY-18]
Target Audience
Population: Individual taxpayers worldwide
Estimated Size: 158000000
- The bill imposes a tax on carbon emissions from fossil fuels which primarily affects industries involved in coal, oil, and natural gas production, hence impacting employment and economic conditions in these sectors.
- In the US, there are hundreds of thousands of workers directly employed in industries related to coal, oil, and natural gas.
- The bill offers a tax credit to taxpayers, which will affect taxpayers nationwide.
- There are approximately 158 million individual taxpayers in the United States according to recent IRS data.
Reasoning
- While creating the interviews, I included participants from varied backgrounds including those directly affected by the fossil fuel industry, both workers and business owners, and regular taxpayers who could benefit from the tax credit.
- Not everyone will be equally affected by the excise tax as it disproportionately impacts regions heavily dependent on fossil fuels, and those working in or owning businesses in this sector.
- The refundable tax credit would indeed provide relief to many taxpayers, especially those below the income threshold for phaseout, potentially improving their self-reported wellbeing.
- I ensured that some interviewees revealed no impact from the policy, reflecting individuals whose energy sources are less dependent on fossil fuels or who fall outside the income limits for a notable tax impact.
Simulated Interviews
Petroleum Engineer (Houston, TX)
Age: 30 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I'm worried about my job security with this new tax. It could lead to cutbacks or even layoffs at my company.
- The tax credit is nice, but it might not make up for potential income loss if I lose my job.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 6 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 5 | 8 |
| Year 10 | 6 | 9 |
| Year 20 | 7 | 9 |
Coal Miner (Pittsburgh, PA)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This excise tax feels like it's targeting my job personally. The coal industry provides for my family.
- A tax credit isn't really a replacement for a steady job and income.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 4 | 6 |
| Year 3 | 4 | 6 |
| Year 5 | 3 | 6 |
| Year 10 | 4 | 7 |
| Year 20 | 5 | 7 |
Software Developer (Los Angeles, CA)
Age: 40 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- This policy seems like a good step towards reducing emissions. I'm optimistic about the shifts it could cause in the energy industry.
- The tax credit is a plus for me and supports my values in renewable energy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 10 | 9 |
Retired Teacher (Des Moines, IA)
Age: 62 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I worry about energy cost increases. On my fixed income, I can't handle big changes in utility bills.
- Getting a tax credit would be helpful, but it's not going to be a huge help.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 6 |
Small Business Owner (Miami, FL)
Age: 45 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- Fuel costs are vital to my business. This tax could increase prices significantly, impacting my bottom line.
- The tax credit is a welcome help for personal finances but doesn't solve business challenges.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 8 |
Freelance Graphic Designer (San Francisco, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 9/20
Statement of Opinion:
- I think it's a necessary move for addressing climate change.
- The extra tax credit helps with my savings goals and eases financial anxiety.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 10 | 9 |
Accountant (Chicago, IL)
Age: 52 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- The tax increase on companies might indirectly affect consumer costs, but personally, I'm more interested in the benefits from the tax credit.
- I support policies that potentially shift our reliance on fossil fuels.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 9 |
Nurse (Phoenix, AZ)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- As a parent, I'm concerned about climate change, and any steps towards reducing emissions are good.
- An extra $1,000 from the tax credit could really help with household expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Graduate Student (New York, NY)
Age: 23 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- I'm all for reducing carbon emissions, but living costs in the city are already high.
- The tax credit could help, but might not cover rent increases due to potential energy price hikes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Construction Worker (Denver, CO)
Age: 47 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- The nature of my work relies on fuel for transportation and machinery, so this tax could increase costs.
- Any additional finance like a tax credit might help offset personal costs, but not work-related expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 7 | 8 |
Cost Estimates
Year 1: $158000000000 (Low: $153000000000, High: $163000000000)
Year 2: $160000000000 (Low: $155000000000, High: $165000000000)
Year 3: $162000000000 (Low: $157000000000, High: $167000000000)
Year 5: $166000000000 (Low: $161000000000, High: $171000000000)
Year 10: $174000000000 (Low: $169000000000, High: $179000000000)
Year 100: $250000000000 (Low: $245000000000, High: $255000000000)
Key Considerations
- The potential economic impact on industries directly affected by carbon taxation.
- Balancing environmental goals with economic growth and labor market stability in fossil fuel industries.
- Managing inflationary effects due to increased energy costs.