Congressman John D. Dingell’s Global Warming Tax Plan, as listed on his website, can in no way be confused with socialism as long as you don’t read it.

Summary of Draft Carbon Tax Legislation
Representative John D. Dingell

The earth is getting warmer and human activities are a large part of the cause.  We need to act in order to prevent a serious problem.  The world’s best scientists agree we need to reduce greenhouse gas emissions by 60-80 percent by 2050 in order to limit the effects of global warming and this legislation will put us on track to do just that. 

This is a massive undertaking, and it will not be easy to achieve, but we simply must accomplish this goal; our future and our children’s futures depend on it. 

In order to get to this end we need to have a multi-pronged approach.  In addition to an economy wide cap-and-trade program, which would mandate a cap on carbon emissions, a fee on carbon is the most effective way to curb emissions and make alternatives economically viable.

Below you will find a summary of the carbon tax legislation I am working on.  I invite you to comment on the proposal. Once I have received your comments, I will look at ways we can address the ideas and concerns brought to my attention by the American people.

We must remember we all have a common goal and are in this fight together.  I look forward to hearing from you.  

The legislation I am proposing would impose the following:

A tax on carbon content:

  • $50 / ton of carbon (phased in over 5 years and then adjusted for inflation)
    Coal, including lignite and peat
    Petroleum and any petroleum product
    Natural gas

A tax on gasoline:

  • .50/ gallon of gas, jet fuel, kerosene (petroleum based) etc…(added to current gas tax) (phased in over 5 years and then adjusted for inflation)
  • Exemption for diesel – The fuel economy benefits of diesel surpass even its emissions benefits; it provides about a thirty percent increase in fuel economy and a twenty percent emissions reduction
  • Biofuels that do not contain petroleum are exempt.  Biofuels blended with petroleum are only taxed on the petroleum portion of the fuel.

**The .50 gas tax is in addition to what is derived from the per ton carbon tax in the previous bullet.

Phase out the mortgage interest deduction on large homes.  These homes have contributed to increased sprawl and longer commutes.  Despite new homes in and of themselves being more energy efficient, the sheer size, sprawl and commutes lead to dramatically more energy use – or to put it more simply, a larger carbon footprint.

Specifically, the proposal: 

    • Phases out the mortgage interest on primary mortgages on houses over 3000 square feet.
      • Exemptions for historical homes (prior to 1900) and farm houses.
      • Exemptions for home owners who purchase carbon offsets to make home carbon neutral or own homes that are certified carbon neutral.
      • An owner would receive 85% of the mortgage interest deduction for homes 3000-3199 square feet
      • 70% for homes 3200-3399 square feet
      • 55% for homes 3400-3599 square feet
      • 40% for homes 3600-3799 square feet
      • 25 % for homes 3800-3999 square feet
      • 10% for homes 4000-4199 square feet
      • 0 for homes 4200 square feet and up

See an example of how the changes in the mortgage interest deduction would work.

Where will the revenue go? 

First and foremost, the Earned Income Tax Credit will be expanded.  This helps lower income families compensate for the increased taxes on fuels.

  • Expansion of the Earned Income Tax Credit
    • Zero Children:    
      • max earned income level from $5,590 to $7000
      • Phase-out from $7000 to $9000
    • One Child:       
      • Max earned income level from $8390 to $10,000
      • Phase-out from $15,390 to $17,000
    • Two or More:   
      • Max earned income level from $11,790 to $15,000
      • Phase-out from $15,390 to $18,000

The revenue from the gas tax goes into the high way trust fund, with 40 % going to the mass transit and 60 % going to roads.  The revenue from the tax on jet fuel goes into the airport and airway trust fund.

Finally, the revenue from the fee on carbon will go into the following accounts:

  • Medicare and Social Security
  • Universal Healthcare (upon passage)
  • State Children’s Health Insurance Program
  • Conservation
  • Renewable Energy Research and Development
  • Low Income Home Energy Assistance Program