# Plain Language Summary: Carbon Reduction and Tax Credit Act

This bill creates a new tax on fossil fuels based on how much carbon they contain, then uses that money to give tax credits back to regular people. Starting in 2023, coal mines and oil and gas wells would pay $50 per ton of carbon in the fuel they produce or import into the United States. This tax would increase each year to keep up with inflation, potentially rising significantly over time. The idea is to make fossil fuels more expensive, which should encourage people and businesses to use cleaner energy sources.

To offset the impact on everyday Americans, the bill provides a $1,000 tax credit for each individual taxpayer and each dependent they claim. So a family of four could get up to $4,000 back on their taxes. However, this credit starts to shrink if you earn more money—it decreases by $100 for every $1,000 you earn above $314,000 (or $157,000 if you're filing taxes as a single person). This means wealthier people get less benefit from the credit. Like the carbon tax, this credit amount would also increase with inflation after 2023.

The practical effect is that the carbon tax would likely increase the price of gasoline, heating oil, coal-based electricity, and other fossil fuel products, since producers would pass the tax cost to consumers. Lower and middle-income families would get some relief through the tax credit, though it may not fully offset higher energy costs. Wealthier households would see less benefit from the credit and would feel more of the price increase. The bill essentially tries to make polluting fuels more expensive while protecting lower-income Americans from the worst financial impacts.

Carbon Reduction and Tax Credit Act

Maloney, Sean Patrick

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.