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Tax Pollution, Not Income: A Winning Issue for Politicians?

David Callahan

If Washington is going debate tax reform, fundamental questions should be on the table: Like, for instance, how we might tax bad things -- i.e., pollution and over-consumption -- instead of good things, like work and wealth creation.

One obstacle to such a rethinking, though, is that energy and pollution taxes scare the heck out of elected leaders. Everyone remembers Bill Clinton's disastrous BTU proposal in 1993 and -- more recently -- how easily a vote for climate change legislation in 2009 was turned into a liability for House members.

The fossil fuel industry has huge clout and taxes on energy are easily attacked for sticking it to the little guy. The poorer you are, the more you pay for gas and heating fuel as a percentage of your total income. And, in places where people drive a lot -- which would be most of America -- few politicians are eager to back proposals that up the cost of driving.

But there may be an easy way to sell energy taxes: Which is to promote such taxes as an alternative to other taxes. Yes, you'll pay more in energy taxes, but you'll pay less in income taxes.

A new poll by Yale and George Mason Universities offers support for this strategy. Respondents were asked the following question:

Would you be more or less likely to vote for a candidate who supports legislation to reduce the federal income tax that Americans pay each year, but increase taxes on coal, oil, and natural gas by an equal amount? This tax shift would be "revenue neutral" (meaning the total amount of taxes collected by the government would stay the same), and would create jobs and decrease pollution?

An impressive 61 percent of respondents said they would be more likely, or somewhat more likely, to vote for such a candidate. Only 20 percent said they'd be less likely.

There's lots of hostility to taxes these days, even though the federal tax burden is at the lowest level in decades. But maybe people would be more positive about all this if they saw that the Treasury was killing two birds with one stone -- I mean planting two saplings with one spade: bringing in revenue, but also helping America use less energy, become more efficient, and pollute less.