What is the PROVE IT Act?

The PROVE IT Act (S. 1863) is a pro-tax, anti-energy bill.

It requires the collection and regular updating of the carbon intensity of domestic and foreign goods and would establish the complex administrative framework that is required for carbon taxes: a carbon tax on imported goods and a domestic carbon tax. It’s not a benign information collection bill. Instead, it would lead to the creation of carbon taxes.

Many bill supporters readily acknowledge that the bill will result in 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. The bill is also a way to collaborate with the EU on its harmful climate policy. Senator Kevin Cramer (R-ND) has repeatedly argued for working with the EU on climate policy. He wrote: “We have an opportunity to counter Putin’s playbook with a bold initiative consistent with European priorities…One aspect of that initiative could be a joint trade mechanism between the United States and the European Union that levels a common carbon fee on imported goods.”

Once a carbon tax on imported goods has been created, the U.S. would impose a domestic carbon tax. This is due both to trade law obligations and because environmental groups and others would not stay silent as domestic industries failed to meet similar greenhouse gas reduction commitments. Also, most domestic manufacturers would oppose a domestic carbon tax absent a corresponding tax on imports to “level the playing field.” The PROVE IT Act would create the database for both types of taxes. Once a corresponding tax on imports is enacted, this would then remove this opposition to a domestic carbon tax.

For legislators who oppose carbon taxes, why even take the risk of facilitating their enactment and implementation by building the administrative framework and lobbying base for such taxes?


Information on the PROVE IT Act

Below is a wealth of information to learn much more about the PROVE IT Act and the wide opposition to this dangerous and harmful bill.

Coalition Opposition to the PROVE IT Act

Once again, over 40 leading conservative and free market-oriented organizations made their strong opposition to the PROVE IT Act known to legislators. This letter sent to the House states, “Americans want affordable and reliable energy, not federal tax schemes that treat energy use as a sin. This bill though would lead to such taxes and is one of the biggest threats to energy and economic prosperity in recent memory.”

This letter demonstrates the incredibly wide opposition to carbon tariffs and the PROVE IT Act. Over 40 leading conservative and free market-oriented organizations signed onto the letter.

CEI Briefing Materials on the PROVE IT Act
More CEI Analysis on the PROVE IT Act

What Experts are Saying

“A carbon tax would hurt the poor and raise domestic prices relative to the prices of many imports. It would be another add-on levy, with exemptions for political friends and punishments for enemies. The PROVE IT Act is a first step toward the tax, and Congress would be wise to reject the bill.”

Diana Furchtgott-Roth
The Heritage Foundation

“Congress shouldn’t be pushing new taxes and punishing energy use. But that’s what the PROVE It Act would lead to. And economically illiterate ‘tough on China’ talk by some bill proponents doesn’t hide this reality. The PROVE IT Act fails to acknowledge that taxing imports ultimately burdens American families and businesses by hiking prices. Then there’s the inevitable domestic carbon tax, which would be devastating to the country. It’s time to ditch this backdoor carbon tax scheme and focus on making life better for everyday Americans.”

Thomas J. Pyle
American Energy Alliance

“It’s clear that carbon accounting is the first step for tax and tariff impositions that would devastate the American economy. The Committee even rejected an amendment from Ranking Member Sen. Shelley Capito (R-WV) that would have prevented the data from being used to implement carbon taxes and tariffs…All Americans must beware of this kind of posturing that opens the door to bureaucratic expansion and drives us toward a carbon tax structure.”

Carla Sands
America First Policy Institute
Additional Background Materials

Policymakers should not:

Support Massive New Taxes. The PROVE IT Act 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.