If you look at page 180 of the 451-page monster bailout bill that easily passed the Senate yesterday (PDF here), you will see that it includes at Section 116 language about the tax treatment of “industrial source carbon dioxide.” It also provides, at Section 117, for a “carbon audit of the tax code.”
What could a provision about the tax treatment of “industrial source carbon dioxide” and another provision about doing a “carbon audit” of the tax code possibly have to do with restoring confidence in Wall Street’s troubled credit and banking markets?
The answer: NOTHING.
This appears to be an attempt by global warming alarmists to lay the foundation for a carbon tax in the middle of another crisis, hoping nobody will notice.
Call your congressman now! More at Planet Gore
UPDATE FROM CAPITAL RESEARCH:
Apparently the bill with the carbon provisions existed already and was passed by the Senate. So, the Senate used the bill as a vehicle for advancing the bailout package. They couldn’t under the Constitution initiate a spending bill in the Senate, so they had to amend one that was already passed by the House. Nonetheless, what was so urgent about the carbon provisions that they had to go with the bailout bill? Who decided which bill to use as the vehicle? Why not pick a non-controversial bill? My guess would be that Senate Majority Leader Harry Reid made the call but it’s just a guess.
An expert offers a better explanation of one of the carbon-related provisions that is in the Bailout 2.0 bill.
According to this wizard of Wall Street, one provision provides preferential tax treatment for publicly-traded partnerships when they trade so-called carbon offsets. It was reportedly already passed in another bill: What’s so urgent about that tax provision that it absolutely had to go into another bill that aims to deal with a financial emergency? So, you can see it’s a little more complex than explained above. However, it’s still bad because it gives legitimacy to these strange indulgences known as carbon offsets and provides a tax incentive for trading them.
I am also informed by this source that Henry Paulson did not push to insert these two carbon-related provisions, but he certainly didn’t object to them, and his track record strongly suggests he would support them. When he ran Goldman Sachs, Paulson released a statement specifically endorsing carbon trading. As the Washington Post reported (June 1, 2006) reported: Last year under Paulson’s direction, Goldman Sachs issued an eight-page position paper on environmental policy, saying it accepts a scientific consensus, led by United Nations climate experts, that global warming poses one of the greatest threats this century.
Like Bush, the Goldman Sachs statement endorsed a market for businesses to buy and sell rights to emit greenhouse gases, saying it will spur technology advances by companies “that lead to a less carbon-intensive economy.” But, it added, “Voluntary action alone cannot solve the climate change problem,” a position contrary to the Bush administration’s view.
Source: Capital Research
The text of the provision on page 180 of the bill (PDF here) is in full below:
SEC. 116. CERTAIN INCOME AND GAINS RELATING TO IN
DUSTRIAL SOURCE CARBON DIOXIDE TREATED AS QUALIFYING INCOME FOR PUBLICLY TRADED PARTNERSHIPS.
5 (a) IN GENERAL.—Subparagraph (E) of section
6 7704(d)(1) (defining qualifying income) is amended by in7
serting ‘‘or industrial source carbon dioxide’’ after ‘‘tim8
9 (b) EFFECTIVE DATE.—The amendment made by
10 this section shall take effect on the date of the enactment
11 of this Act, in taxable years ending after such date.
12 SEC. 117. CARBON AUDIT OF THE TAX CODE.
13 (a) STUDY.—The Secretary of the Treasury shall
14 enter into an agreement with the National Academy of
15 Sciences to undertake a comprehensive review of the Inter16
nal Revenue Code of 1986 to identify the types of and
17 specific tax provisions that have the largest effects on car18
bon and other greenhouse gas emissions and to estimate
19 the magnitude of those effects.
20 (b) REPORT.—Not later than 2 years after the date
21 of enactment of this Act, the National Academy of
22 Sciences shall submit to Congress a report containing the
23 results of study authorized under this section.
24 (c) AUTHORIZATION OF APPROPRIATIONS.—There is
25 authorized to be appropriated to carry out this section
26 $1,500,000 for the period of fiscal years 2009 and 2010.