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The Senate Finance Committee should consider instituting a modest tax on CO2 emissions and use the revenues to lower the effective corporate tax rate.

The Senate Finance Committee should consider instituting a modest tax on CO2 emissions and to use the revenues to lower the effective corporate tax rate. A $15/ton CO2 tax levied economy-wide would raise $90 billion annually, which could fund not only the expanded incentives here (and an expanded R&D credit), but also from statutory rate reduction. ITIF estimates that if the tax revenues were used to pay for expanded corporate tax incentives of the kind described above U.S. manufacturers as a group would actually pay lower taxes.