A White House official on Tuesday shot down the suggestion that the Trump administration is weighing a carbon tax or value-added tax as part of tax reform, mere hours after other officials said that those taxes were under consideration.
In the meantime, top congressional Republicans expressed skepticism about the ideas.
“As we have said many times, the president’s team is hearing input from experts on all sides of the tax reform debate as we formulate what will ultimately be the president’s plan to enact the first significant tax reform since 1986,” deputy press secretary Lindsay Walters said in a statement provided to the Washington Examiner Tuesday afternoon. “As of now, neither a carbon tax nor a VAT are under consideration.”
A carbon tax would impose a tax on emissions of carbon dioxide, effectively penalizing coal energy, which President Trump has said he wants to boost.
A value-added tax would effectively be a consumption tax, imposed at each stage of production of a good or service.
The Washington Post on Tuesday reported, citing unnamed White House officials, that the Trump team was considering both taxes as possibilities for raising revenue in the context of tax reform, perhaps as a replacement for the controversial import tax being considered by House Republicans.
Yet, by the afternoon, the White House had backed away from that suggestion.
Sen. Orrin Hatch, the top Republican on the Senate Finance Committee, downplayed the report that the administration was considering a carbon tax in an interview with the Washington Examiner Tuesday afternoon.
“They’d be stupid not to kick that around, along with every other idea,” Hatch said, adding that presidential leadership would be needed to pass tax reform. Nevertheless, he said, a carbon tax would not have Republican support.
In an interview on CNBC, House Ways and Means Committee Chairman Kevin Brady, responsible for drafting the House GOP tax plan, said that “it’s healthy that the Trump team is thinking outside the box” on options for tax reform.
He warned, however, that both House and Senate Republicans have “weighed in pretty heavily with resistance” to the ideas of a carbon tax or value-added tax.
Last year, in a non-binding resolution, the House voted to condemn the idea of a carbon tax, with no Republicans voting against it.
Conservatives have long been divided by the concept of a value-added tax, with many taking the position that, partly because it collects revenues efficiently, a value-added tax would lead to greater government spending. That debate surfaced in the Republican presidential primary, when Sen. Marco Rubio of Florida characterized Texas Sen. Ted Cruz’s proposed business tax as a value-added tax and saying that it would expand the government.
