Fighting Climate Change With an Income Tax

There's been a lot of talk about the Green New Deal, but not that much is known about it. Rep. Alexandria Ocasio-Cortez (D-N.Y.), who is promoting it, explained the program on 60 Minutes on January 6.

4 minute read

January 7, 2019, 1:00 PM PST

By Irvin Dawid


Tax

beeboys / Shutterstock

"Rep. Alexandria Ocasio-Cortez (D-N.Y.) is floating an income tax rate as high as 60 to 70 percent on the highest-earning Americans to combat carbon emissions," reports Matthew Choi for POLITICO on Jan. 4.

Speaking with Anderson Cooper in a “60 Minutes” interview scheduled to air Sunday, Ocasio-Cortez said a dramatic increase in taxes could support her “Green New Deal” goal of eliminating the use of fossil fuels within 12 years — a goal she acknowledges is ambitious.

She does clarify in the interview and the Mediaite transcript that "not all income for a high earner is taxed at such a high rate. Rather, rates increase on each additional level of income, with dramatic increases on especially high earnings, such as $10 million," explains Choi. In other words, she wants to add more progressivity to the income tax to pay for her plan to address climate change, which she calls the Green New Deal.

What is the Green New Deal?

As of Jan. 4, Ocasio-Cortez does not list "Green New Deal," nor, for that matter, even "climate" or "environment" on her Congressional webpage, though she does list "energy," although it has yet to be filled. However, her campaign website does have an extensive description for Mobilizing Against Climate Change listed under "issues." While it doesn't mention specific measures, it does provide Ocasio-Cortez's perspective on addressing climate change:

It’s time to shift course and implement a Green New Deal – a transformation that implements structural changes to our political and financial systems in order to alter the trajectory of our environment...

Right now, the economy is controlled by big corporations whose profits are dependent on the continuation of climate change...Rather than continue a dependency on this system that posits climate change as inherent to economic life, the Green New Deal believes that radically addressing climate change is a potential path towards a more equitable economy with increased employment and widespread financial security for all...

Why not a carbon tax?

We'll have to wait till Sunday to see if Anderson Cooper asked Ocasio-Cortez if she had considered taxing carbon emissions to finance climate action, as most economists advise, including William D. Nordhaus of Yale University who received a Nobel Prize in economics last October for his assessment of the economic impact of climate change, including his advocacy for governments to tax carbon emissions.

Meanwhile, we can read a New York Times New Year's Eve column on funding the Green New Deal by another Nobel laureate in economics, Paul Krugman:

So what does the Green New Deal mean? It’s not entirely clear...But the main thrust, as I understand it, is that we should make a big move to tackle climate change, and that this move should accentuate the positive, not the negative. In particular, it should emphasize investments and subsidies, not carbon taxes.

He lays out the pluses and minuses of carbon taxes, although his main focus is more political, what Democrats "figuring out what, exactly, they will try to do if they gain policymaking power in 2021."

A POLITICO news article (via Planetizen) last month suggested that some in the environmental community were turning away from carbon taxes due to the French Yellow Vests movement, triggered by a fuel tax hike stemming from a climate plan, and the defeat of a Washington state carbon fee initiative last November.

A New York Times op-ed published Dec. 27 makes the same point. Calling it "politically toxic," former New York Times environmental reporter, Justin Gillis, suggests other ways to cut emissions, such as renewable energy initiatives, but he doesn't address the funding issue.

We've been here before – with traffic congestion and public transit.

Last year, New York City Mayor Bill de Blasio wanted to repair his city's ailing subway by adopting "a so-called millionaires tax, while Gov. Andrew Cuomo initially favored a cordon area congestion toll, similar to the London Congestion Charge. Neither advanced, though a surcharge on for-hire vehicle trips in Manhattan below 96th street was approved by the state legislature in the governor's budget last April.

Heretofore, the debate on using carbon pricing to fight climate change has been between those who favored them and those who opposed them. Now that Rep. Ocasio-Cortez has revealed her funding measure preference, perhaps the debate will change to a comparison of carbon and income taxes.

History of the term, "Green New Deal"

Sierra news editor, Heather Smith asks (and answers), "Is this deal really so new?" in a feature article on Nov. 28, 2018.

Sort of. The term “Green New Deal” has been making the rounds for at least a decade, and many policy wonks in the USthe UK, and other countries around the world [pdf] have developed their own proposals for what that might look like during that time. 

The Sierra Club’s Living Economy program has a detailed overview of various Green New Deal ideas here.

Related:

Friday, January 4, 2019 in Politico

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Use Code 25for25 at checkout for 25% off an annual plan!

Redlining map of Oakland and Berkeley.

Rethinking Redlining

For decades we have blamed 100-year-old maps for the patterns of spatial racial inequity that persist in American cities today. An esteemed researcher says: we’ve got it all wrong.

May 15, 2025 - Alan Mallach

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

May 14, 2025 - Diana Ionescu

Rendering of California High-Speed Rail station with bullet train.

California High-Speed Rail's Plan to Right Itself

The railroad's new CEO thinks he can get the project back on track. The stars will need to align this summer.

May 19, 2025 - Benjamin Schneider

Cobblestone street with vintage street lamps in Savannah, Georgia.

Savannah Reduces Speed Limits on Almost 100 City Streets

The historic Georgia city is lowering speed limits in an effort to reduce road fatalities.

5 hours ago - WJCL

Sign for Loma Alta Park in Altadena, Los Angeles County.

A Park Reborn: Resilience and Renewal in Fire-Stricken Altadena

Rebuilt in just two months after the devastating Eaton Fire, Loma Alta Park now stands as a symbol of community resilience and renewal, even as some residents hope recovery efforts will continue to support housing stability and long-term equity.

6 hours ago - Pasadena NOw

Colorful historic homes in Madrid, Spain.

Spain Moves to Ban 66,000 Airbnbs

The national government is requiring the short-term rental operator to remove thousands of illegal listings from its site as part of an effort to stem a growing housing crisis.

May 20 - The New York Times

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.