Baucus said he would pour his efforts into overhauling the federal tax code when he announced Tuesday that he wasn’t seeking reelection in 2014.
That, combined with Rep. Dave Camp (R-Mich.) wanting to leave his mark on the House Ways and Means Committee during his last term as chairman, has breathed life into such a possibility.
But a carbon tax is still likely dead on arrival.
Most of the Senate voiced opposition to a carbon tax in a March vote on the nonbinding Senate Democratic budget. The GOP-controlled House won’t back it either. On top of that, the White House has said flat out that it’s not pursuing a carbon tax.
Still, its inclusion in the Senate Finance Committee paper gives climate activists and clean-energy wonks pushing the concept something to chew on.
On a carbon tax, the paper said policymakers would need to decide whether to impose fees on fossil fuel producers or on emitters. Cost issues — such as how to price the fee, how progressive it should be and how to phase it — also requires addressing.
The paper identified legislation co-sponsored by Sens. Bernie Sanders (I-Vt.) and Barbara Boxer (D-Calif.) as a possible model.
That bill would impose a fee on large fossil fuel producers, 60 percent of which would be returned to residents to offset costlier energy.
Instituting a carbon tax was one of several policy options for overhauling the energy portion of the tax code.
Other suggestions included eliminating all energy sector tax expenditures, shifting to technology-neutral tax incentives and tinkering with and eliminating some tax provisions.