In view of the stalled situation in climate change lawmaking, transferring the focus from direct congressional lawmaking to the possibility of delegated lawmaking by agencies may provide a new perspective to break the gridlock of federal carbon tax legislation. Taxes, however, in practice are generally less delegable than environmental and other regulations. Specifically, the Internal Revenue Service and Treasury are not permitted to determine tax rates. This is also the case for environmental taxes in the Internal Revenue Code. Though some environmental statutes seem to provide some implied and untested delegation of power to regulate by taxation, the Environmental Protection Agency (EPA) has not yet imposed any environmental taxes under such delegation. This Article argues for expanding the delegation of environmental taxes to realize their regulatory purposes, and proposes to delegate the EPA the power to determine and adjust carbon tax rates. A comparative study shows that Chinese legislature has considered the regulatory purpose in expanding the delegation of tax rates and tax base in the new Environmental Protection Tax Law, which provides a valuable reference to the U.S. Delegating the power to determine carbon taxes rates advances the EPA’s regulatory mission due to its comparative advantages of expertise in environmental policymaking, flexibility to the uncertainty and volatility of the climate change issue, as well as coordination of environmental policy instruments. The regulatory nature of environmental taxes also weakens the distributional and transfer-of-property concern and thus justifies the legitimacy of environmental tax delegation. Moreover, the EPA is likely to be more responsible than Congress in producing urgently needed but politically unpopular carbon tax. This article concludes that the proposal to delegate carbon tax rates is also likely to pass the constitutional muster based on the Origination Clause and the Non-Delegation Doctrine, as well as potential non-tax-delegation doctrines.
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Taxing Power Delegation for Better Environmental Regulation: A Proposal on Federal Carbon Tax Policymaking,
Nat. Resources J.
Available at: https://digitalrepository.unm.edu/nrj/vol61/iss1/5