Kerry dismisses talk of ‘gas tax’ in climate bill

Sen. John Kerry (D-Mass.) is trying to preempt politically damaging claims that upcoming Senate climate legislation would raise gasoline taxes, claiming recent speculation about it is inaccurate.

“There is no gas tax, never was a gas tax, will not be a gas tax, I don’t know where that came from, but it is just wrong. Period,” Kerry told reporters in the Capitol Tuesday.

He later added: “There is no gas tax, we didn’t contemplate a gas tax, there will not be a gas tax, the gas tax is 18.4 cents today and it will be that when this bill is passed.”

However, his comments also raised new questions about how the bill – which Kerry is crafting with Sens. Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) – will address transportation sector carbon emissions.

The senators have reportedly been discussing a fee paid by petroleum companies – one “linked” to the price of carbon permits under the greenhouse gas limits applied to electric power plants. (Various iterations of the “linked fee” idea have been kicking around the climate debate for some time.)

But Kerry on Tuesday said “There is not even a linked fee, there is not a tax, there is nothing similar.”

Pressed for clarification about whether the “linked fee” idea has been jettisoned, he softened his comment slightly, stating, “Certainly not the way it was described previously, nothing like that.”

It has never been precisely clear how the fee would work or where in the petroleum supply chain it would be levied.

“The money we generate comes from the companies. It is an assessment on what they do in the carbon world. They are creating a carbon product, they are going to pay a fee,” Graham said of the fee on March 25. He also said that while some of it would be passed along to consumers at the pump, the bill would include a rebate mechanism of some sort to defray consumer costs.

Kerry, Graham and Lieberman plan to unveil their bill April 26.