Chairman of the House Energy and Commerce Committee John Dingell (D-MI), is working on a carbon tax bill which could be ready for introduction this week. The legislation would impose a tax on carbon emissions of $50 per ton, which would be phased in over five years and then adjusted for inflation. The energy sources that would be taxable are: coal, petroleum and natural gas. A gasoline tax of 50 cents per gallon, also phased in over five years and adjusted for inflation, would also be instituted. An exemption for diesel would be made. Biofuels, such as ethanol, which contain no petroleum, would be exempt from this tax. In addition, the bill would phase out the mortgage interest deduction on large homes. Dingell's argument is that these types of homes have contributed to sprawl and longer commutes. This phase out would apply to homes over 3,000 square feet (would include an exemption for homes built prior to 1900 and for those who purchase carbon offsets).
This legislation is considered a "message bill" and is not likely to advance, particularly since House Ways and Means Committee Chairman Charlie Rangel (D-NY) does not favor this approach to climate change. Dingell, whose committee has primary jurisdiction over the authorizing side of climate change, has said that the public might feel differently about what it takes to address climate change if they knew how much it would cost. A cap-and-trade bill, at this point, is considered the favored approach to addressing the issue.