Possible bargain between Greens and Conservatives?

"Whatever our views on global warming, we should all be able to agree that government should not use climate policy as an excuse to impose new burdens on taxpayers."

Here is the latest op-ed from AFP Arizona director Tom Jenney, as published in the March 13 edition of the Arizona Republic:

Pairing carbon tax with other cuts a fair bargain

In warming war, option to gain bilateral support

With cap-and-trade stalled in the aftermath of the Copenhagen summit, and with the Obama administration at least paying lip service to crossing the partisan aisle, it is time for advocates of global-warming policies to look seriously at a "grand bargain."

In a nutshell, this would involve imposing a carbon tax, but offsetting - or more than offsetting - all carbon-tax revenues with revenue reductions from pro-growth tax cuts.

This approach is already on the table in Congress. Last year, Republican Congressmen Jeff Flake of Arizona and Bob Inglis of South Carolina teamed up with Democratic Congressman Dan Lipinski of Illinois to offer a carbon-tax bill that would offset its tax burdens dollar for dollar with reductions to payroll taxes.

The Flake-Inglis-Lipinski approach has several advantages over cap-and-trade, but two are of vital interest to conservatives.

First, a carbon tax is honest. It calls a tax a tax, rather than attempting to hide a $600 billion revenue increase from 2012 to 2019, which the administration's new budget accounts for with a blank line labeled "allowance for climate policy."

The Flake-Inglis-Lipinski bill recognizes the economic damage caused by new taxes, and seeks to limit that damage. By contrast, the administration has no realistic plan to offset the damaging economic effects of cap-and-trade policies, just a lot of empty talk about "green jobs" that are supposed to miraculously appear.

The compromise approach would also pre-empt the Environmental Protection Agency from engaging in a gigantic backdoor bureaucratic power grab. Under a twisted interpretation of the 1970 Clean Air Act, the EPA is on the verge of seizing command-and-control authority over America's energy production and consumption, regulating our entire way of life and imposing massive costs on all Americans.

The second advantage of a straightforward tax is that it would be constitutional. Under the U.S. Constitution, the federal government is allowed to impose excise taxes. But it is an extreme contortion of the Interstate Commerce Clause to allow Congress to regulate greenhouse-gas emissions through a scheme such as cap-and-trade.

For conservatives, a carbon-tax regime would be much more palatable if it resulted in a substantial net tax cut for the country. That requires replacing the payroll-tax reductions (which should remain the dedicated funding source for Social Security and Medicare) in the Flake-Inglis-Lipinski bill with an aggressive slate of permanent pro-growth rate cuts (or repeals) of key taxes, such as corporate income, personal income, capital gains, dividend, and estate taxes.

While any carbon tax would necessarily create distortions by punishing energy-intensive production, it would have the virtue of being a consumption-based tax, which makes it possible that a well-designed slate of pro-growth tax cuts could make the overall package an economic winner.

Whatever our views on global warming, we should all be able to agree that government should not use climate policy as an excuse to impose new burdens on taxpayers.

--Tom Jenney is the Arizona director for Americans for Prosperity, a nationwide organization of citizen leaders committed to advancing the individual's right to economic freedom and opportunity. For information, go to www.aztaxpayers.org.