Carbon tax funds infrastructure, but low-income households face energy cost surge

What it does

This bill creates a federal carbon tax starting at $40 per metric ton of CO2-equivalent emissions in 2027, rising annually by 5% plus inflation, applied to fossil fuels, industrial processes, and certain manufactured products. It dedicates 75% of revenue to a trust fund that distributes money to highway maintenance (70%), state grants for low-income households (10%), airport infrastructure, weatherization, energy R&D, coastal flooding mitigation, and worker assistance. The remaining 25% goes to general revenue. The bill also imposes border adjustments—tariffs on carbon-intensive imports and rebates for exports—to prevent companies from relocating production overseas.

Why we flagged it

The bill's core mechanism is a progressive carbon tax designed to internalize climate costs and fund infrastructure and climate adaptation. It is not primarily a deregulation, subsidy, or commemorative measure—it is a revenue-raising environmental policy with explicit public-goods allocation.

What the text implies

• Border carbon adjustments (tariffs on imports, rebates on exports) may trigger trade disputes or retaliation under WTO rules; the bill requires presidential notification to foreign countries but does not guarantee compliance with international trade law.
• The tax escalates automatically (5% + inflation annually) without future congressional votes, locking in cost increases for decades; this removes political friction but also removes democratic checkpoints.
• Low-income assistance is capped at 10% of revenue and limited to households at 150% of poverty line; if carbon tax revenues fall short of projections or energy costs spike faster than anticipated, the assistance may not fully offset regressive impacts.
• The bill exempts fossil fuels used for carbon capture and storage (CCS) from tax via refund, creating a subsidy for CCS technology; this may incentivize CCS deployment but also reduces net revenue and may benefit fossil fuel companies that invest in CCS.
• State grants are distributed by state-level emissions, not by state population or need; high-emission states (often industrial or rural) receive more, potentially concentrating benefits geographically rather than by vulnerability.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Citizens face higher energy and product costs from the carbon tax, which will ripple through gasoline, heating, and electricity prices. However, the bill dedicates 10% of revenue ($billions over 10 years) to direct grants for low-income households to offset energy costs, plus 70% to highway maintenance and 4% to coastal flooding mitigation—public goods that benefit broad populations. The net effect depends on whether the low-income assistance and infrastructure gains outweigh the regressive cost

Who stands to gain

• Highway construction and maintenance contractors
• Renewable energy and battery storage manufacturers
• Carbon capture and storage technology companies
• Energy efficiency and weatherization service providers
• Low-income households (via state grants)
• Fossil fuel companies with CCS investments (via tax refunds)

Named in the bill

Internal Revenue Service, Environmental Protection Agency, Department of Energy, Department of Transportation, Department of Labor, U.S. Customs and Border Protection, Highway Trust Fund, Airport and Airway Trust Fund, RISE Trust Fund (newly created), Leaking Underground Storage Tank Trust Fund, Reforestation Trust Fund

Where it stands

1 cosponsor: 1 Democrats.

• May 13, 2025 — Introduced · Congress.gov: “Introduced in House”
• May 13, 2025 — Referred to House Committee on Agriculture and House Committee on Science, Space, and Technology · Congress.gov: “Referred to the Subcommittee on Highways and Transit”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 3 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $1,209,417 in lobbying spend. A filing names 61 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Brian Fitzpatrick, the sponsor, reported $2,362,211 in PAC receipts in the 2026 cycle.

• American Trucking Associations — $720,000 on 1 filing
• American Society of Civil Engineers — $489,417 on 2 filings

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.