Survey: Carbon tax on gas wouldn't cause much pain at the pump

Sep 20, 2017

More than 90% of people say they could handle paying an extra 36-cent tax on each gallon of gasoline without feeling financially stressed.

That's from the latest survey by the University of Michigan's Energy Institute.

Researcher John DeCicco says that 36 cents translates to a $40 per ton carbon tax, that could be imposed to offset the environmental damage from carbon emissions.

"In spite of how much everyone will say how much they they hate higher taxes, a $40 carbon tax would leave more than 90% in their comfort zone," says DeCicco.

DeCicco says a carbon tax could pay for renewable energy subsidies, for example, or for making road and other infrastructure less vulnerable to severe storms caused by climate change.

An even higher carbon tax on gasoline could be used to push consumers into electric vehicles.

"There's lots of very good uses that carbon tax revenues could be put to," he says, "and with enough left over to compensate those that would be most affected."

Those most affected, of course, would be people with lower incomes. Fourteen percent said they would find a 36-cent tax on gasoline unaffordable. DeCicco says policy makers crafting a carbon tax could include a tax credit for lower income people to minimize the impact on their smaller household budgets.