Carbon Reduction and Tax Credit Act
Bill: H.R.8572 | Sponsor: Rep. Maloney, Sean Patrick (D-NY)
Policy area: Taxation

Summary:
Carbon Reduction and Tax Credit Act
This bill imposes an excise tax on coal mines or oil or gas wells equal to $50 per ton of carbon contained in fuel produced at such mines or wells located in the United States, or entered into the United States for consumption, use, or warehousing. It also allows an individual taxpayer (other than a nonresident alien) a refundable income tax credit equal to $1,000, subject to a phaseout if the taxpayer's adjusted gross income exceeds a certain threshold amount. The dollar amounts in this bill are subject to a inflation adjustment in calendar years after 2023.

To amend the Internal Revenue Code of 1986 to impose an excise tax on 
 fuel based on the carbon content of such fuel, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Carbon Reduction and Tax Credit 
Act''.

SEC. 2. EXCISE TAX ON CARBON CONTENT OF FUELS.

    (a) In General.--Chapter 38 of the Internal Revenue Code of 1986 is 
amended by adding at the end thereof the following new subchapter:

                   ``Subchapter E--Carbon Content Fee

``Sec. 4691. Carbon content.

``SEC. 4691. CARBON CONTENT.

    ``(a) In General.--In the case of a coal mine or an oil or gas 
well, there is hereby imposed a tax equal to $50 per ton of carbon 
contained in fuel produced--
            ``(1) at such mine or well located in the United States, or
            ``(2) entered into the United States for consumption, use, 
        or warehousing.
    ``(b) Adjustment for Years After 2023.--
            ``(1) In general.--In the case of any calendar year after 
        2023, the amount under subsection (a) shall be increased by an 
        amount equal to--
                    ``(A) such amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year, 
                determined--
                            ``(i) by substituting `calendar year 2022' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof, and
                            ``(ii) by substituting for the C-CPI-U 
                        referred to in section 1(f)(3)(A) the amount 
                        that such CPI would have been if the annual 
                        percentage increase in CPI with respect to each 
                        year after 2022 had been one percentage point 
                        greater.
            ``(2) Terms related to cpi.--
                    ``(A) Annual percentage increase.--For purposes of 
                subparagraph (B)(ii)(II), the term `annual percentage 
                increase' means the percentage (if any) by which C-CPI-
                U for any year exceeds the C-CPI-U for the prior year.
                    ``(B) Other terms.--Terms used in this paragraph 
                which are also used in section 1(f)(3) shall have the 
                same meanings as when used in such section.
            ``(3) Rounding.--Any increase determined under subparagraph 
        (B) shall be rounded to the nearest multiple of $50.''.
    (b) Clerical Amendment.--The table of subchapters for chapter 38 of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

                 ``subchapter e--carbon content fee''.

    (c) Effective Date.--The amendments made by this section shall 
apply to fuel produced after December 31, 2022.

SEC. 3. CREDIT.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after section 36B the following new section:

``SEC. 36C. CREDIT FOR TAXPAYERS.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year with 
respect to each taxpayer who is an individual and each dependent of the 
taxpayer an amount equal to $1,000.
    ``(b) Limitation Based on Adjusted Gross Income.--The amount of the 
credit allowable under subsection (a) shall be reduced (but not below 
zero) by $100 for each $1,000 (or fraction thereof) by which the 
taxpayer's adjusted gross income exceeds $314,000 ($157,000 in the case 
of a return other than a joint return).
    ``(c) Inflation Adjustment.--In the case of a taxable year 
beginning after 2023, the dollar amounts in subsections (a) and (b) 
shall be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `2022' for `2016' in 
        subparagraph (A)(ii) thereof.
If any increase under this clause is not a multiple of $50, such 
increase shall be rounded to the next lowest multiple of $50.
    ``(d) Nonresident Alien Ineligible for Credit.--No credit shall be 
allowed under this section to any nonresident alien.''.
    (b) Conforming Amendments.--
            (1) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36C,'' after ``36B,''.
            (2) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36C,'' after ``36B,''.
            (3) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36C 
        the following new item:

``Sec. 36C. Credit for taxpayers.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.
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