Carbon tax funds infrastructure, but EPA loses power to regulate emissions for 14 years
H.R. 3338 — MARKET CHOICE Act · Filed by Brian Fitzpatrick (R-PA) · 1 cosponsor · Introduced May 13, 2025 · Referred to committee
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What it does
This bill replaces federal fuel excise taxes with a new tax on greenhouse gas emissions from fossil fuels, industrial processes, and certain manufactured products, starting in 2027. Revenue (75% of collections) flows into a new trust fund that finances highway infrastructure (70%), state grants to low-income households (10%), weatherization, coastal flooding mitigation, and carbon capture research. The bill also imposes border taxes on imports from high-emission sectors and rebates exports, while blocking EPA from regulating greenhouse gases under the Clean Air Act for taxed emissions until 2039—unless emissions targets are missed.
Why we flagged it
The bill's operative mechanism is a carbon tax on fossil fuels and industrial emissions paired with infrastructure funding. However, the centerpiece is a 14-year moratorium on EPA greenhouse-gas regulation for taxed sources—a regulatory shield that is the bill's true distinguishing feature and primary point of contention.
- Section 301 adds a 14-year ban on EPA greenhouse-gas regulation under the Clean Air Act for taxed emissions, unrelated to the tax mechanism itself.
- Section 212 modifies tax credits for coal-fired power plants, including sequestration and capacity requirements, substantively unrelated to the carbon tax or infrastructure funding.
What the text implies
- The EPA moratorium (Section 330) prevents the agency from regulating greenhouse gases on health/welfare grounds for 14 years even if emissions exceed targets, creating a regulatory gap that persists even if the carbon tax fails to meet its own emission-reduction goals.
- Border tax adjustments (Section 102) may trigger trade disputes under WTO rules and could be challenged as protectionist, despite the bill's framing as climate-motivated.
The full analysis lists 5 implications of this text.
Who stands to gain
Highway construction and infrastructure contractors; Carbon capture technology developers and operators; Coal-fired power plant operators (via advanced coal project credits)