- - Tuesday, November 6, 2012

It is madness to propose an energy-cost increase at a time when unemployment and gasoline prices are high and family incomes are sagging. Unfortunately, economically destructive policy ideas are not a deterrent for the enemies of fossil fuels.

Rep. Jim McDermott, Washington Democrat, rose to national prominence during his controversial 2002 trip to Baghdad, where he claimed the Iraqi government was more trustworthy than his president. More recently, he stated he was “tired of reading the Constitution.” It appears he also is tired of reading complaints of rising fuel prices, as he has proposed a carbon tax that, according to some analysts, could add nearly $9,000 to a family’s energy costs in the next decade.

The Managed Carbon Price Act of 2012 would impose a carbon tax on fossil fuels essential for the pursuit of our individual and collective happiness and economic prosperity. The tax would rise exponentially in coming years, with no cap, in a specious attempt to “cover” the federal deficit.

Carbon-emission reduction is controlled by regulation and energy subsidies in the tax code. Costly mandates and voluntary private-sector action brought U.S. emissions to the lowest levels in 20 years, and they are still falling rapidly.

Proponents claim replacing carbon subsidies with carbon taxes would result in accelerating emission reductions, but some pro-green-energy analysts disagree. California’s Breakthrough Institute has long supported subsidy reform and government spending on renewables, but its experts have determined that carbon taxes would decrease emissions marginally with an economic cost that could reach 900 percent more than current subsidies.

A study by the Joint Program on the Science and Policy of Global Change at Massachusetts Institute of Technology also reviewed replacing subsidies with taxes, determining that without best-case economic growth, emissions would decrease only slightly more than current assessments. Would subsidies really go away if taxes were imposed?

“Revenue neutral” is a taxation lie of the highest order, including when applied to carbon taxes.

Mr. McDermott’s bill directs the U.S. Treasury to set the “price” of carbon emissions. Energy producers and users would then purchase carbon permits. (No provision actually mandates government to issue such permits.) Businesses could only purchase permits seven days before specific production activity, leaving them with massive consumption analysis and paperwork costs and at the mercy of government bureaucrats likely to operate with all the speed, efficiency and humanity of the DMV.

Carbon-tax supporters claim revenue neutrality because 75 percent of revenues would go into a carbon-tax government lockbox, which then would send monthly carbon-tax offset refunds to all American adults — a cash transfer from American employers to its citizens, with government as the arbiter.

Never mind the infrastructure cost of the program, this bait-and-switch makes clear the bill’s true intent and the goal of radical environmentalists: to punish industries and consumers who use fossil fuels to the point where their use becomes, ironically, extinct. If the bill’s intended emission goals are reached by 2055, there would be virtually no fossil-fuel industry in the United States, nor any manufacturing dependent upon it.

If carbon taxes pass, we should invest in donkey carts from factories powered by windmills manufactured before 2055.

In their scheme to make us believe a carbon tax is a good idea, supporters suggest its revenues also would go to deficit reduction. According to an economic study by analysts at D.C.-based Capital Alpha Partners, who call carbon taxes “life-wrenching [for] ordinary working-class Americans,” carbon-tax revenues in early years, when rates are low, are estimated at $153 billion to $459 billion. Federal corporate tax receipts currently are just about $118 billion. These simple numbers demonstrate the devastating burden of this tax on American employers, their workers, energy availability and consumer pricing, to say nothing of increased costs to municipalities providing heat and air conditioning to schools and hospitals, and gas for police cars and firetrucks, as CapAlpha noted.

Radical environmentalists are at war with carbon dioxide — i.e., air. Because their extreme position has become toxic for mainstream America, they disguise their true agenda — the eradication of fossil fuels — with false language that suggests nonexistent economic benefits.

Oil, natural gas and clean-coal industries support more than 10 million American jobs. Although we have lost 5 million manufacturing jobs since 2001, the sector remains critical to American security and prosperity. It is our small-business base, providing 1 in 6 private-sector jobs, according to the National Association of Manufacturers.

Instead of crippling America with a costly, regressive, agenda-driven tax the scope of which has never been seen before, spending cuts and common-sense, pro-growth tax and regulatory policies that untie the hands of job creators are a much better idea.

Carbon taxes need to be relegated to the bad-idea bin. Permanently.

Kerri Toloczko is senior vice president for policy at the Institute for Liberty.

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