Sen. Pat Roberts: Carbon tax would hurt already fragile economy

09/09/2012 12:00 AM

09/07/2012 8:12 PM

Rep. Jim McDermott, D-Wash., introduced legislation last month to impose a “carbon tax” on the American people. We’ve been down this road before. It was a bad idea then, and it is now.

A carbon tax is an additional tax on the essential fuels that power our economy – gasoline, diesel, natural gas and electricity. It would cause prices at the pump to increase, electricity rates to go up, and natural gas bills to rise. Because nearly everything we buy is transported by trains or trucks, or grown on farms that use diesel equipment, or derived from oil and gas, significant increases in energy prices will ripple throughout the entire economy.

The folks trying to sell this idea will spend a lot of time talking about how the revenues from this tax can be offset by reducing other taxes. That is nonsense. Proposed as a small tax, it would be hidden in a way that would make it easy to raise over time, like nearly every other tax.

Studies on similar carbon-pricing schemes show the devastating economic effect these proposals could have for the Kansas economy. We could lose up to 30,000 jobs. Households could see disposable income reduced up to $1,400 by 2030. According to a report by the American Council for Capital Formation, over the next 10 years Kansans could see the cost of natural gas increase by 25 percent, prices at the pump rise by 9 percent and electricity rates increase by 8 percent. Costs associated with a massive carbon scheme could slow Kansas’ gross domestic product by almost $4.5 billion by 2030.

An energy tax would also be regressive. Families of modest means spend a larger percentage of their income on energy than do families with higher incomes.

Carbon taxes have been enacted in other countries, and they have been a failure. Australia recently imposed an energy tax (also pitched as a “carbon” tax). The predictable result was increased costs for hospitals, farmers and people on fixed incomes. Interestingly, there is one organization thriving as a result of this policy. The Australian government has had to hire more bureaucrats to keep up with the paperwork.

What’s even more troubling is that this proposal, if implemented unilaterally and without participation by countries such as China and India, would do almost nothing to lower global temperatures, which is the point of carbon-reduction proposals. So U.S. industries would be placed at a competitive disadvantage to China and India with absolutely no environmental gain.

A carbon tax would be a hardship for consumers and disastrous for the economy. As a senior member on the Senate Finance Committee, I will fight this idea at every turn.

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