GOP Establishment Pushes Trump on Carbon Tax

A group of Establishment royalty from past GOP administrations is urging President Donald Trump to back the implementation of a carbon tax.

At stake are two different campaign promises that Trump made, claims a top opponent to the tax.

“Baker wants Trump, who campaigned as a tax cutter who would revive U.S. energy production, to advocate new taxes on fossil fuels.”

And the floating of a carbon tax comes at a very awkward time for the Trump White House.

On Wednesday, Republicans took heat from conservative media mogul Matt Drudge, who tweeted Wednesday that the “Republican party should be sued for fraud. NO discussion of tax cuts now. Just lots of crazy. Back to basics, guys!”

Drudge has complained before that the GOP-led Congress has been slow to repeal the Affordable Care Act, aka Obamacare. Drudge also wondered where the White House was on that issue.

“White House eyeing executive order targeting ‘conflict minerals’ rule,” Drudge tweeted. “Meanwhile, is Obamacare penalty tax still in place?”

White House press secretary Sean Spicer was asked about the tweets on Wednesday by a Breitbart News reporter.

Spicer said Obamacare was a “mammoth thing to repeal and replace,” and that Congress wanted to get it right.

But many conservatives are also grumbling that the GOP is going to take most of the year to also reform the corporate tax rate, which is the highest in advanced nations.

The carbon tax was advocated by former President Obama. It is also supported by Elon Musk, the CEO of Tesla Motors, who recently met with Trump.

And the tax is supported by Trump’s Secretary of State Rex Tillerson, the former CEO of ExxonMobil. Tillerson has not advocated for the tax under Trump — at least not publicly.

The carbon-tax theory is that the tax would cause the market to respond, and create efficiencies that force the private sector to switch to cleaner “green” energy, such as solar.

But solar and wind energies do not produce the massive kilowatt-hours that coal and natural gas do at power plants. Nuclear power does, but nuclear plants are expensive to build and maintain.

Another problem: Installing a carbon tax in the United States would punish American power producers with little effect on emerging economies such as India, where a lot of coal is burned to create electricity.

“If we do this and no one else does, we have just shot ourselves in the foot,” said Marlo Lewis Jr., a senior fellow at the Competitive Enterprise Institute.

Lewis blasted the idea in a Wednesday blog post at CEI’s website.

“[The] plan reportedly calls for a carbon tax that starts at $40 per ton and escalates from there,” Lewis wrote. “The immediate impact would be an increase in gasoline prices of 36 cents per gallon.”

The plan, which would include a “rebate” to taxpayers, is being pushed by the Climate Leadership Council. It is led by two former secretaries of state, James Baker III and George Shultz, who were scheduled to meet on Wednesday with Vice President Mike Pence and Gary Cohn, Trump’s chief economic adviser.

They were to be joined by Hank Paulson, who, like Baker, is also a former treasury secretary. Paulson served under President George W. Bush. He was the architect of the Troubled Asset Relief Program (TARP) during the market crash of 2008.

The tax has long been a goal of both liberals and some moderate Republicans. A few conservative economists also support it, as it would replace a regulatory regime with taxation.

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At least — that is what is promised.

Lewis cannot help but recall Baker was part of Republican George H. W. Bush’s administration in 1990, when Bush abandoned the most effective campaign pledge in modern history: “Read my lips. No new taxes.”

Bush raised taxes, violated his pledge, and lost the next election.

“The question I have for James Baker is whether he learned anything from the implosion of the George H. W. Bush presidency,” Lewis wrote. “Baker wants Trump, who campaigned as a tax cutter who would revive U.S. energy production, to advocate new taxes on fossil fuels. He’s urging Trump to break two campaign pledges!”