Desperate Democrats start pressing for energy taxes

As the 110th Congress careens into its final months, and the that controls the Senate, the House and the begin to assume its somewhat limited record of achievement, it is certain that there will be lots of terrible ideas offered by the desperate Democratic members of Congress.

Heading that list has to be the legislation from Sen. Sheldon Whitehouse, Rhode Island Democrat, who has apparently taken a moment or two away from both of his all-White (or just about all-White) yacht clubs and decided that what the nation really needs is higher energy prices.

His legislation would impose a carbon border adjustment tax, which sounds imposing, but is actually pretty simple. If the United States imports energy that has the potential to create greater emissions of greenhouse gases (like carbon dioxide) than our own domestic energy, a tax would be imposed on those imports. The same mechanism works for finished goods. If their manufacture results in higher levels of greenhouse gases, a tax that attempts to capture the value of the difference in greenhouse gases emitted would be imposed on the goods.

There are a couple of problems with this.

Most immediately and destructively, it would create a backdoor tax on energy. Everything made, everything transported and everything that keeps people warm or provides electricity invariably involves the use of natural gas, oil or coal. No matter where or when it is imposed, a “carbon dioxide” tax is a tax on energy.

Make no mistake. Consumers would pay this tax. Businesses would just pass along the cost. To his great credit, Mr. Whitehouse recognizes that our trade commitments require that an import tax on carbon dioxide would obligate the US to impose a tax on our own domestically produced energy and goods.

That is, of course, the real goal of the enterprise — to impose an energy tax on the American economy.

Like all energy taxes everywhere, this tax would be regressive, falling hardest on those least able to afford it — the poor, the elderly, those on fixed incomes and local institutions such as schools and hospitals.

Such a tax would not affect the trajectory of global warming at all. But it would make everything that is made possible by energy — so, essentially everything in a modern economy — more expensive.

Mr. Whitehouse’s legislation would increase the cost of gasoline home heating oil, natural gas and – by about 50 cents per gallon to start. No clue why Team Biden and the environmental community aren’t talking more about this great, well-timed idea.

In response to Mr. Whitehouse’s legislation, colleague Sen. Chris Coons, Delaware Democrat, adopted the attitude of: “Hold my beer.”

His legislation (S.2378), introduced a year ago but which is now starting to get some traction among Democrats, also would impose a tax on imports of products made from or containing carbon dioxide. To be compliant with our trade obligations, his legislation also would require a domestic energy tax.

But Mr. Coons wants the Environmental Protection Agency to help set the price of that tax, so you have to think it would match the prices the agency uses to estimate the cost of regulations.

That would add as much as $1.50 to each gallon of gasoline. Mr. Coons doesn’t stop there. Tucked deep inside the legislation is a provision that would do something Congress has never done — give EPA explicit authority to regulate greenhouse gases.

Page 6 of the legislation lays it out: “… to comply with any Federal, State, regional, or local law, regulation, policy or program which is (1) in effect at the time of such determination, including any such law, regulation , policy, or program which is implemented after the date of enactment of the FAIR Transition and Competition Act, and (2) designed to limit or reduce greenhouse gas emission, including (A) the Clean Air Act (42 USC 7401).

Finally, and most disturbingly, it has become clear that there are those in corporate America who would be happy to see Mr. Whitehouse or Mr. Coons successfully increase the price of energy on consumers, especially if the alternative is an increase in corporate taxes.

It would be good to know where, exactly, the business community stands on these proposed laws. It would be especially helpful to learn where the Business Roundtable or the Chamber of Commerce, stand on this legislation, especially since they have made it clear that they support new energy (carbon dioxide) taxes. At the moment, it seems as if they would rather see their customers suffer than take increased corporate taxation head-on.

One can almost understand the senators. They have political reasons for despicing consumers. The business community supporting more taxation on their customers is another matter altogether.

• Michael McKenna, a columnist for The Washington Times, is the president of MWR Strategies. He was most recently an assistant to the president and deputy director of the Office of Legislative Affairs at the White House.

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