Matthew Kandrach – President, CASE

August 21, 2018 – https://bit.ly/2w0o0dl

Despite the current energy boom in America, gasoline prices are on the rise. Thus, our policymakers should be working to ensure families, businesses, and manufacturers all have adequate access to the affordable and reliable energy that they count on—gasoline and diesel, as well as natural gas and coal.

Unfortunately, a handful of Republicans in Congress seem to have forgotten how important affordable energy is to their constituents. A recent bill introduced by Rep. Carlos Curbelo (R-FL) and co-sponsored by Reps. Brian Fitzpatrick (R-PA) and Francis Rooney (R-FL), for instance, would implement a national carbon tax that would raise energy prices for all consumers, as well as increase prices for essential products that we all rely on every day.

The bill, labeled the “Market Choice” act, is anything but market-based. It would replace the Federal gas tax with a nationwide carbon tax. Immediately, it would increase gas by roughly 5 cents per gallon above the existing gas tax. But, unlike the gas tax, the carbon tax would also apply to natural gas and coal, resulting in higher electricity costs for all. Even the bill’s proponents conclude that the average American’s energy costs will increase by $275 in 2020, and only grow after that. Costs of consumer goods would also certainly rise, as a host of American manufacturers would also be subject to the new tax.

As for the tax revenue, 70 percent wouldbe placed in the Highway Trust Fund, while the remaining 30 percent would be funneled to a range of various government programs and grants. Indeed,  a new level of wasteful special-interest spending. This creates more opportunities for the government to pick “winners and losers” in the marketplace and is certainly not “market choice” as the name of the bill suggests.

Reps. Mia Love (R-UT) and Trey Hollingsworth (R-IN) may also be considering co-sponsoring the carbon tax. Both Republicans voted against a recent resolution in the House stating that a carbon tax would be detrimental to the economy. All five of the House Republicans supporting a carbon tax voted in favor of the tax reform bill that passed last year, which has boosted manufacturing and business optimism to an all-time high, resulting in the lowest unemployment rate in 17 years. These are the kinds of policies consumers want to see, so why would these Republicans support legislation that would counteract this economic success?

Under the Curbelo bill, the largest American manufacturing sectors – ranging from steel and aluminum, to cement and glass, to chemicals and electronics, to biomass and biofuels – would initially be subject to the $24/ton carbon tax. This would drastically raise the costs of a number of goods for American consumers.

But it gets even worse.

The bill would also create extreme regulatory uncertainty and contribute to the growth of government bureaucracy by giving the U.S. Environmental Protection Agency (EPA) the authority to subject additional manufacturing sectors to the taxes (and thus determine who pays into our federal highway program), placing unimaginable power in the hands of the EPA. This is precisely the kind of government growth that Republicans like Rep. Curbelo have traditionally staunchly opposed.

The costs are not just limited to goods produced in the U.S. The bill also creates a new Border Adjustment Tax (BAT) on imported goods, in “an amount equal to increased costs paid by comparable U.S. products.” This vague policy would not only be difficult to enforce, but would undoubtedly result in higher prices on a countless number of imported goods that American families use every day..

Any impact on global climate change, which is the purported goal of a carbon tax, would be insignificant even according to the climate models.

The Curbelo carbon tax bill is antithetical to conservatism and should be roundly rejected by all those who would like to see Congress pass legislation that is market-based and consumer-focused.