Skip Navigation

Here's Why Congress and Think Tanks Think a Carbon Tax Would be Disastrous

June 6, 2018

House Majority Whip Steve Scalise, R-La., and Rep. David McKinley, R-W.Va., recently introduced a resolution that explains why a carbon tax would harm the economy and why it should not be enacted

House Majority Whip Steve Scalise, R-La., and Rep. David McKinley, R-W.Va., recently introduced a resolution that explains why a carbon tax would harm the economy and why it should not be enacted. A similar resolution, introduced by Scalise in 2016, passed the House of Representatives by a vote of 237 to 163. Six Democrats joined the entire Republican caucus in supporting the resolution.

I applaud Scalise and McKinley’s unswerving effort to prevent a carbon tax in the U.S., and you should as well. The resolution is important and timely because a group of old-guard, “swamp” Republicans, including Reagan-era luminaries like James Baker and George Shultz, have joined with anti-fossil-fuel zealots such as Obama Secretary of Energy Steven Chu and billionaire former New York Mayor Michael Bloomberg to push a new federal carbon tax.

In addition, a number of states have considered or are still considering carbon taxes in their most recent legislative sessions. In Washington State, for example, activists were unable to con voters into passing a carbon tax initiative in 2016, and, despite support from billionaire Tom Steyer, a carbon tax proposal died in the legislature in March. Despite repeated failure, anti-progress environmentalists are back again, gathering signatures to put another carbon tax initiative on Washington’s ballot.

Scalise and McKinley’s resolution would put Congress on record again opposing the carbon tax, which President Trump also opposes.

The resolution states any carbon tax would result in myriad harms, including an “increase [in] energy prices, including the price of gasoline, electricity, natural gas, and home heating oil.” It would also “mean that families and consumers will pay more for essentials like food, gasoline, and electricity,” causing the most harm for “the poor, the elderly, and those on fixed incomes.” The resolution also claims a carbon tax would “lead to more jobs and businesses moving overseas.”

Scalise says his resolution is meant to combat those “special interests” working to stop Republicans’ plan to make America energy dominant again. McKinley has said that a carbon tax "will take money out of the pockets of middle-class families" and "lead to a decrease in the production of America’s abundant energy resources that would result in lost jobs" and higher energy costs.

A group of 29 research institutes, legal foundations, and grassroots-activist groups, including The Heartland Institute, submitted a letter to Congress expressing support for the anti-carbon-tax resolution.

The letter noted multiple independent analyses have concluded a carbon tax would cost jobs, reduce economic growth, and disproportionately harm the poorest Americans. For instance, the signatories write, “a 2014 Heritage Foundation report found that a $37 per ton carbon tax would lead to a loss of more than $2.5 trillion in aggregate gross domestic product by 2030 … [or] more than $21,000 in income loss per family. In addition, a carbon tax would cost over 500,000 jobs in manufacturing and more than one million jobs by 2030. According to a 2013 CBO report, a carbon tax is highly regressive.”

Neither a carbon tax nor domestic regulations will do anything to prevent global climate change, even if human carbon dioxide emissions are contributing to it. However, carbon taxes will, ironically, increase pollution overall. Facing higher energy costs, some or even many American companies will be forced to move operations overseas to remain profitable. Countries such as China and India, where many companies are likely to relocate to, have weaker environmental standards and less efficient methods of production than in the U.S. As companies fleeing the carbon tax shift production overseas, additional air pollution will spew into the atmosphere.

There is never a good time to enact bad policy, and a carbon tax is one of the worst policies we could adopt.

[Originally Published at the Washington Examiner]

Article Tags
Taxes Environment
Author
H. Sterling Burnett, Ph.D. is a Heartland senior fellow on environmental policy and the managing editor of Environment & Climate News.
hsburnett@heartland.org