Not long ago I told you that President Obama may use approval for the Keystone XL pipeline as a wedge to impose a carbon tax not just on the United States, but also on Canada. Now we find out that Senators Barbara Boxer and Bernie Sanders (both Democrats) have introduced another tax plan in the Senate.
A potential proposal of a carbon tax and all the damage that would accompany such misguided policies has been making headlines in Washington of late. Senators Barbara Boxer (D-CA) and Bernie Sanders (I-VT) have introduced legislation that would implement this damaging tax.
The National Association of Manufacturers released a study finding that this tax would be disastrous for the economy. (As if things aren’t bad enough already.)
The report, titled, Economic Outcomes of a U.S. Carbon Tax, found that levying such a tax would result in higher prices for natural gas, electricity, gasoline and other energy commodities. Manufacturing output in energy-intensive sectors could drop by as much as 15 percent and 7.7 percent in non-energy intensive sectors.
The study examines two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent, and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent. In both cases, any revenue raised by the carbon tax would be far outweighed by the negative impact to the overall economy. A carbon tax would lead to lower real wage rates because companies would have higher costs and lower labor productivity. Over time, workers’ incomes could decline relative to baseline levels by as much as 8.5 percent. The increased costs of coal, natural gas and petroleum products due to a carbon tax would ripple through the economy and result in higher production costs and less spending on non-energy goods.
Can you afford to pay more for electricity, gasoline and food? That will be the result.
One CEO says that a carbon tax would be economic suicide.
“The notion that some policymakers have in Washington that an economy-wide tax of this nature is a good idea is flatly wrong,” said Jay Timmons, president and CEO of the association. “Our nation’s economy and family budgets can’t take it. As consumers of one-third of our nation’s energy supply, manufacturers and our employees will struggle with higher energy prices. A carbon tax will severely harm our ability to compete with other nations.”
“I just think that it’s national suicide,” said Greg Knox, CEO of Franklin-based Knox Machinery. “In talking to my customers, we’re just appalled by the fact the government would choose to consider some of this legislation in light of how many problems we have now in our economy.”
I think that reelecting President Obama and the Democrats in the Senate was an act of national suicide. This carbon tax would just speed things along. They’re literally trying to send us back to the Dark Ages.