House to Vote on Carbon, Oil Taxes
The House is scheduled to vote Friday on two bills opposing efforts to rig U.S. energy markets against fossil fuels:
- H. Con. Res. 89, Expressing the sense of Congress that a carbon tax would be detrimental to the U.S. economy, sponsored by Rep. Steve Scalise (R-La.)
- H. Con. Res. 112, Expressing the sense of Congress opposing the President’s proposed $10 tax on every barrel of oil, sponsored by Rep. Charles Boustany (R-La.)
Each resolution makes a compelling case that the proposed anti-fossil fuel measure would imperil U.S. jobs, investment, and competitiveness.
H. Con. Res. 89 warns that a carbon tax would:
- Tax the fuels—coal, oil, and natural gas—on which Americans depend for 82 percent of all the energy they consume.
- Increase energy prices, including the price of gasoline, electricity, natural gas, and home heating oil.
- Make families and consumers pay more for essentials like food, gasoline, and electricity, with costs falling hardest on the poor and persons on fixed incomes.
- Impose disproportionate burdens on industries, jobs, states, and geographic regions engaged in energy production and manufacturing.
- Increase the cost of every good manufactured in the United States and reduce economic growth.
- Decrease American competitiveness vis-à-vis countries that do not impose carbon taxes, inducing more U.S. jobs and businesses to move overseas.
- Penalize rather than encourage the American ingenuity that has developed vast energy resources on private and State-owned land, creating significant job growth and private capital investment.
In a joint letter supporting the Scalise resolution, 22 free market and limited government organizations cite carbon tax studies by the Congressional Budget Office (CBO) and the National Association of Manufacturers (NAM). According to CBO, a carbon tax would “drive up the prices of goods and services throughout the economy,” imposing larger relative burdens on poorer households, who “spend a larger share of their income on goods and services whose prices would increase the most, such as electricity and transportation.”
NAM’s analysis makes the favorable assumption that carbon tax revenues would be “recycled” to reduce the national debt and income taxes. It nonetheless finds that a carbon tax designed to cut U.S. emissions 80 percent below 2005 levels by mid-century, a target popular with climate campaigners, would have severe adverse impacts on employment, wages, GDP growth, and tax revenues.
H. Con. Res. 112, the Boustany resolution, contends that President Obama’s proposed $10 per barrel oil tax would:
- Hit the U.S. oil and gas industry at the worst possible time, when the collapse in oil prices is forcing companies to slash payrolls and dividends.
- Effectively impose a 33.3 percent tax on $30-$35 a barrel oil, making Obama’s proposal the highest excise tax on any domestic product.
- Add up to 25 cents per gallon to the current 18.4 cents per gallon federal gas tax.
- Jeopardize the future of an industry that is a major driver of U.S. employment and investment, but which has also experienced 114,000 job losses since October 2014.
- Harm other industries that supply the oil and gas sector, such as manufacturers that have announced 37,221 layoffs in the past 12 months.
- Put U.S. oil companies at a competitive disadvantage vis-à-vis OPEC and Russian producers.
Let’s put this in historical perspective. When oil prices and profits are high, progressives blame Big Oil for consumers’ pain, accuse U.S. oil companies of “price gouging,” and demand that Congress impose “windfall profits” taxes. The accusation is hogwash and the alleged solution counterproductive, but at least the basic socialist ‘logic’ is easily discerned.
Not so with Obama’s proposal. If punitive taxes are the remedy when oil prices and profits are soaring, why are such taxes the remedy when prices and profits are crashing?
The U.S. shale boom is chiefly responsible for the expansion of global oil supply since 2008 and the consequent decline in crude oil and gasoline prices since 2012. Due to the fall in prices, the typical U.S. household got the equivalent of a $660 pay raise last year. But the industry has become a victim of its own success. Due to tumbling oil prices, some 40 publically-traded U.S. oil producers experienced $67 billion in combined losses in 2015, nearly 70 U.S. and Canadian oil companies filed for bankruptcy protection, and Texas alone lost 63,000 petroleum-related jobs last year.
Obama’s proposal would decrease the virtual pay raise consumers reap from low oil prices. Why does he want to “gouge” consumers? Apparently, because that’s the only way to cause additional oil industry losses, layoffs, and bankruptcies.
The ‘logic’ at work here is that of war. It matters not whether oil companies are thriving or failing. The ‘solution’ is always basically the same, because the objective is always the same: Delegitimize, bankrupt, and, ultimately destroy fossil-energy companies.
Too harsh an assessment? No, it’s the obvious meaning of their latest battle cry: “Keep It in the Ground.”