Janet Yellen, former chairwoman of the Federal Reserve and President-elect Joe Biden’s pick for Treasury secretary, has repeatedly pushed for a national carbon tax that would force drivers to pay more at the pump.
Glowing reactions from the media to Yellen’s selection paint her as a centrist figure and a compromise choice while ignoring her more extreme positions and taking shots at Republicans. USA Today referred to Yellen as “a centrist and consensus builder” who will work at “persuading recalcitrant Republicans in the Senate.” The Washington Post’s profile of Yellen insisted she is a “pragmatic, mainstream economist” and a policymaking version of “Mary Poppins.”
Reading such rave reviews, taxpayers may be surprised to learn of the alleged centrist’s support for a $2 trillion tax on American energy that would raise federal taxes on gasoline by more than 200%.
In the run-up to the election, Yellen stressed the likelihood of the United States adopting a carbon tax should Biden become president. As recently as October, Yellen told Reuters that the combination of the coronavirus pandemic, Black Lives Matter protests, and wildfires in California could boost support for the proposal. “There really is a new kind of recognition that you’ve got a society where capitalism is beginning to run amok and needs to be readjusted,” Yellen explained in the interview.
These comments do not reflect the worldview of a centrist, and Mary Poppins never called for the reordering of free market societies.
Yellen’s advocacy for a national energy tax goes far beyond comments made in one interview. In February 2017, Yellen helped launch the Climate Leadership Council, an “international policy institute” focused on lobbying Congress to adopt carbon tax legislation. Specifically, Yellen’s organization advocates for a tax beginning at $43 per ton and set on autopilot to increase every year at 5% above inflation.
A carbon tax of this level would increase gasoline prices by roughly 40 cents per gallon and raise average household energy costs by $480 per year. In total, the plan would amount to a $2 trillion tax hike, raising taxes by $219 billion a year, on average, between 2020 and 2030.
This isn’t according to the findings of some conservative think tank, but rather the internal analysis of the Hillary Clinton campaign, which considered an identical carbon tax proposal to that of Yellen’s following Sen. Bernie Sanders’s endorsement of a carbon tax during the 2016 primary.
The Clinton campaign’s report was newsworthy at the time because it was brought to light by the leaked emails of John Podesta, the chairman of the Clinton campaign. Podesta’s blunt assessment of the tax’s political viability dealt a significant blow to carbon tax advocates, as Podesta stated in an email that he had “done extensive polling on a carbon tax. It all sucks.”
Trevor Houser, the Clinton campaign’s energy adviser, believed the tax’s affect on consumers would be too far-reaching and urged the campaign to avoid “Bernie’s carbon tax fantasy fight.” In the end, the Clinton campaign refused to back a carbon tax, concluding it “would have a disproportionate impact on low-income households.”
If a $43 per ton carbon tax is too radical of a proposal for a Democratic primary against Sanders, then it should be rejected by the so-called centrist pick to lead the Treasury Department.
Mike Palicz is the federal affairs manager at Americans for Tax Reform.
