One of the more intriguing ideas in the energy bill that the House passed over the weekend was that of doing a "carbon audit" of the U.S. Tax Code. Exactly how Congress proposes to conduct such an audit is another matter.

The proposal came from Rep. Earl Blumenauer, D-Ore. A member of the House Ways and Means Committee, Rep. Blumenauer wants the National Academy of Sciences to do the carbon audit "to identify those tax provisions and policies that have the greatest influence on the generation of carbon emissions and other greenhouse gases and to estimate the magnitude of those effects," according to his Web site.

The study would look at not only energy taxes, which the House bill makes radical changes in by ending billions of dollars in tax breaks for oil and gas companies and shifting the incentives to alternative energy. It would also look at some of the less obvious parts of the Tax Code, such as tax policies affecting urban development. The energy bill also closed the so-called "Hummer Tax Loophole" that provided tax incentives for business purchases of luxury SUVs weighing over 6,000 pounds.

But the carbon audit of the Tax Code could potentially go a lot further. Here are a few ideas:

* Stop printing the Tax Code. Think of all the trees we could save if we just stopped printing out all those thick books.

* Increase the alcohol fuel credit. This should also help cut down on drunk driving because it will be a better idea to put the alcohol in the gas tank instead of in a cocktail glass.

* Take a closer look at the reforestation credit.  Planting new forests is a great way to cut down on carbon emissions, assuming you don't turn around and chop them down for firewood.

* Lessen the effects of the alternative minimum tax.  Growing numbers of taxpayers are forced to tear up their carefully prepared deduction schedules and supporting documentation when they find out that they have to pay the AMT anyway, adding to the landfill problem.

* Amortization of pollution control facilities. If you can build a good pollution control facility, why amortize it? Just write off the whole thing.

* Golden parachute payments. These should be deductible since parachutes are environmentally friendly modes of transportation.

* Exemption of farmers' cooperatives from tax. This should be extended to include a tax credit to Amish farmers who still drive the horse and buggy on their farms.

Do you have other ideas for applying the carbon audit to the Tax Code? Write to me at michael.cohn@sourcemedia.com and we'll run the best ideas in a future column.


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