Carbon Tax Pushers Can't Take A Hint

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Posted by Andreas Hellmann on Monday, November 26th, 2018, 11:31 AM PERMALINK


Carbon tax pushers just can't take a hint. For the past decade carbon taxes have been thoroughly rejected by voters. In the November election, blue Washington state voters handily rejected a state carbon tax measure, and carbon-tax-pushing congressman Carlos Curbelo was kicked out of office. Right now in France, hundreds of thousands of French citizens are protesting Macron's proposed carbon tax. 

But today Bloomberg reports that a handful of congressmen led by Rep. Ted Deutch (D-Fla.) will introduce a new carbon tax bill this week. Just like the Macron proposal, the Deutch tax hike will aggresively ratchet up, year after year.

"The proposed carbon tax is a gas tax and a tax on your electric bill. Worse, it increases automatically year after year so the politicians can raise your taxes without ever having to vote," said Grover Norquist, president of Americans for Tax Reform. "The tax will be hidden in the price of all goods and services. A hidden tax. A permanent tax. An uncontrolled tax that increases without end."

A carbon tax is not only toxic at the ballot box but also creates resistance on the streets as demonstrations enter their eighth day in France. Protests are being held mainly in Paris but also nationwide over a proposal by Macron to increase the "fuel tax" designed to curb fuel usage.

The new law would tax 55 Euro ($63) per ton of carbon starting in January 2019. A liter of diesel already costs 1.90 Euro and regular gas costs over 2.0 Euro per liter. That's $8.20 per gallon of diesel or almost $9 per gallon of regular gasoline. 

Hundreds of thousands of protesters all across the country are bringing the protest to the streets and highways, wearing “yellow vests” – “gilets jaunes” so called because the protesters are wearing the high-visibility vests that French drivers are obliged to carry in case of emergencies or accidents. The grassroots movement relies on social media and online petitions to spread their message. 

In the U.S. and Canada this year, the carbon tax was firmly rejected by voters:

November 6, 2018 --Washington State voters reject a carbon tax, again. Washington state voters rejected a carbon tax ballot measure -- Initiative 1631 -- by a margin of 56-44. This is the second consecutive time Washington state voters rejected a carbon tax ballot measure (See the November 8, 2016 entry below).

November 6, 2018 -- Florida voters reject carbon-tax-pushing Congressman Carlos Curbelo. In September -- with much fanfare at the National Press Club -- Florida congressman Carlos Curbelo introduced a bill to impose a massive carbon tax on the American people. The bill would have imposed a $688 per year hike in household energy costs, hitting lower income households the hardest. If re-elected, Curbelo pledged to hit the road and travel across the country to sell the legislation. Instead, voters kicked him out of office.

June 7, 2018 -- Canadian voters revolt against carbon tax-pushing politicians. Due to her support for a carbon tax Liberal Ontario Premier Kathleen Wynne went down in the worst defeat of a governing party in modern Ontario history. Liberal Wynne was in favor of a carbon tax and decisively lost to the conservative Doug Ford, who ran on abolishing the carbon tax. Ford made an explicit, written promise to the voters that he would end the carbon tax if elected.

July 12, 2018 -- Anti-carbon tax United Conservatives wins Alberta elections. Laila Goodridge has been elected Member of the Legislative Assembly of Fort McMurray-Conklin in the byelections with over 65.9% of the votes by fighting against a carbon tax. "Tonight, voters overwhelmingly rejected the NDP's carbon tax, their smear and tax hike agendas," said Goodridge.

July 12, 2018 -- Anti-carbon-tax conservative Devin Dreeshen wins election. He won the Innisfail-Sylvan Lake (Alberta, Canada) byelection. "They voted by huge numbers to send this failed NDP government a message that you’re living on borrowed time and next year we’re going to fire this NDP government and scrap their carbon tax to get Alberta’s economy back on track.”

A bill summary obtained by Bloomberg Environment shows the Congressman Deutch measure would impose a $15-per-metric-ton carbon tax, ratcheting up $10 per year.

According to a new study by the Insitute for Energy Research, a carbon tax would hurt the economy and cause particular stress on state budgets. Key findings include:

A carbon tax will not be pro-growth. Most carbon tax scenarios reduce GDP for the entirety of the 22-year forecast period. Better than break-even economic performance may not be possible unless revenue is devoted entirely to corporate tax relief. A lump-sum rebate results in lost GDP equal to between $3.76 trillion and $5.92 trillion over the 22-year forecast period.

A carbon tax is not an efficient revenue raiser for tax reform. Using standard scoring conventions, a carbon tax is likely to only produce net revenue available for tax reform of 32 cents on the dollar.

No carbon tax modeled is consistent with meeting the long-term U.S. Paris Agreement INDC. As a standalone policy, consistent with World Bank and IEA estimates, all carbon tax scenarios analyzed are far off of the trajectory the Paris Agreement sets for 2040, undermining claims that a tax-for-regulation swap will satisfy emissions commitments.

Depressed GDP leads to long-term fiscal challenges, with particular stress on states. Persistent reductions in economic performance lead to trillions of dollars in lost GDP, thereby reducing state tax revenues and straining state budgets. The average annual burden on the states and local government during the first 10 years of the tax would range from $18.9 to $30.6 billion.

Stay tuned this week for more carbon tax updates from ATR.

Photo Credit: NightFlightToVenus

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