Gas Tax Hike, Mortgage Deduction Cut To Be Proposed in Greenhouse Gas Reduction Plan

Gas Tax Hike, Mortgage Deduction Cut To Be Proposed in Greenhouse Gas Reduction Plan

Congressman John Dingell says he intends to introduce a bill that would reduce or eliminate some mortgage deductions and raise the federal tax on gasoline by 50 cents a gallon as part of an effort to help reduce greenhouse gas emissions.

But before he puts the legislation into the hopper, the Michigan Democrat, chairman of the House Energy and Commerce Committee, wants to hear from the people who would be most affected.

That's you and me.

"In order to reduce greenhouse gases and make the planet safe and healthy for future generations it will take a significant investment from all of us,” Dingell said.  “A fee on carbon emissions requires a tithe from all citizens and industries, but no one entity will be unfairly leveled with a devastating burden. More importantly, it provides an incentive for change in our economy and our way of life."

In addition to a gas tax hike, the measure would boost the jet fuel tax, impose a $50-per-ton fee on carbon emissions from coal, natural gas and most petroleum products and remove all or part of the income tax deduction for mortgage interest on large homes.

Dingell's proposals would add almost $600 to the annual operating costs of a 25 mpg  passenger car that would use 600 gallons of gasoline and emit about 5.8 tons of CO2 during 15,000 miles of travel.

That's not a big hit for many, but the mortgage deduction part of Dingell's proposal may well generate a lot of opposition. After all, realtors and home builders keep telling us,  it's American to aspire to ever-bigger homes with ever-bigger tax deductions.

As the congressman sees it, though, "these homes have contributed to increased sprawl and longer commutes. Despite new homes in and of themselves being more energy efficient, the sheer size, sprawl and commutes lead to dramatically more energy use– or to put it more simply, a larger carbon footprint."

Taxpayers with homes smaller than 3,000 square feet would be able to deduct all mortgage interest on their federal income tax returns. But the allowable deduction for homes in excess of 3,000 square feet would decrease as home size increased, in 200-square-foot increments, until, at 4,200 square feet and above there would be no mortgage interest deduction.

Dingell hopes the measure would reduce demand for the largest homes.

Here's the link to read the proposed bill and send feedback to Dingell.

John O'Dell:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter.