Why policymakers should reject the PROVE IT Act: It’s a pro-tax, anti-energy bill

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The PROVE IT Act (S. 1863) requires the collection and regular updating of the carbon intensity of domestic and foreign goods. It establishes the administrative framework that is required for the imposition of carbon taxes: a carbon tax on imported goods and a domestic carbon tax. The bill would lead to both of these taxes, as has been explained in detail. Many bill supporters readily admit that it will lead to carbon taxes of some kind. Since 2021, about half of the sponsors of the PROVE IT Act have sponsored bills imposing carbon taxes on imports. Many of these sponsored bills also impose domestic carbon taxes.  

Policymakers should not:

Support Massive New Taxes. The bill would lead to two new taxes: a carbon tax on imported goods and a domestic carbon tax. It’s not just the domestic carbon tax that would inflict financial pain on Americans. The burden of a carbon tax on imports would primarily be borne by American businesses and consumers. It acts as a domestic consumption tax. Foreign countries would also retaliate against American exporters, with American farmers likely to bear a significant brunt of the pain.

Punish Energy Use. Since more than 80 percent of the world’s energy comes from coal, natural gas, and oil, which produce carbon dioxide emissions, carbon taxes are taxes on the energy that make modern life possible, keeps billions of people alive every winter, and powers nearly all the agricultural machinery, transport vehicles, and refrigeration equipment that sustain the global food supply. Put more simply, it’s a tax on modern life. It would, among other things, make medical care, housing, communications, nutrition, and transportation less affordable, especially for people who already struggle to pay their bills.

Hurt the Poor. All Americans would suffer through higher prices due to these taxes. This would always be harmful, but it’s especially harmful now as the United States suffers through years of inflation. Higher prices due to carbon taxes, especially to meet basic needs including food, shelter, electricity, and transportation, would have a disproportionate impact on low-income households.

Legitimize Extreme Climate Policies. Carbon taxes are the dream of climate extremists. The PROVE IT Act would help to make this dream come true and fuel rather than tamp down their “climate ambitions.” Carbon taxes would help to legitimize other extreme policies such as efforts to ban natural gas appliances and gasoline powered vehicles and limit the consumption of meat.

Follow the Climate Lead of the EU. The European Union (EU) has created the first and only carbon border adjustment mechanism (CBAM) and it includes both a carbon tax on imports and a domestic carbon pricing scheme. Instead of fighting and rejecting the EU’s disastrous climate policy, the PROVE IT Act embraces what the EU is doing. Many supporters advocate for a similar CBAM and seek to create a “carbon club” of countries that join together to impose carbon taxes in some fashion.


Bottom Line: The PROVE IT Act is a pro-tax and anti-energy bill that would impose severe economic harm on Americans and punish how our nation produces the energy needed for daily life. The US House recently passed a resolution against domestic carbon taxes (H.Con.Res.86) in a bipartisan manner. This resolution lays out many of the harms connected to domestic carbon taxes.

The PROVE IT Act would help to make those harms a reality.