Full Title: Legislative Analysis: The SWAP Act
Author(s): JOSEPH MAJKUT, NADER SOBHANI, DAVID BOOKBINDER
Publisher(s): Niskanen Center
Publication Date: November 13, 2019
Full Text: Download Resource
The SWAP Act will 1) fund a payroll tax reduction by taxing GHG pollution; 2) spur significant reductions in GHG emissions; 3) and offer a market alternative to the expansion of federal GHG regulations.
The Stemming Warming and Augmenting Pay (SWAP) Act would levy a tax on greenhouse gas (GHG) emissions from fossil fuels, certain large industrial facilities, and certain products, while reducing the tax rate of the payroll tax. The GHG tax would start at $30 per metric ton of CO2-equivalent emissions and increase at a real rate of 5 percent per year. Modeling estimates indicate that in the first 10 years, the SWAP Act reduces taxed GHG emissions by about 40 percent against 2005 baseline levels and raises over $1.2 trillion.Seventy percent of revenue from the SWAP Act would go toward reducing the payroll tax for employees and employers, with the remainder going toward climate adaptation, energy research and development, and measures to mitigate the impacts of the tax for the poor and retired. The SWAP Act amends the Clean Air Act to impose a rolling moratorium on EPA regulation of GHG emissions from stationary sources as long as emissions are below specific targets for 2021-2029.