Top Five Pitfalls of a Carbon Tax

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Posted by James Morrone Jr on Friday, February 5th, 2016, 9:24 AM PERMALINK

Every so often, the issue of a carbon tax is raised by misguided lawmakers and ideological extremists. The fact is a carbon tax will cause far more harm than good. A carbon tax would not only have a crippling impact on the affordability of energy in the U.S., but would further weaken a fragile economy and increase dependence on foreign goods and energy providers. This is not what we need right now. 

Listed below are the top five reasons why lawmakers should oppose a carbon tax in the United States. 

Impact to U.S. GDP. The projected impact of a carbon tax on U.S. GDP would be a massive loss of at least $146 billion by year 2030. The overall output of the American economy will be decreased; in both terms of investment and labor supply. 

Skyrocketing energy prices. Energy prices, both in gasoline and electricity, will increase by 20 to 30 percent respectively, under a carbon tax scheme.

Increased job loss. In a 3-year span alone, over 400,000 jobs would be lost due to the effects of the tax, with a projected loss of 1 million jobs by the year 2030.

Reduced purchasing power and wages. The tax would also effect wages; the resulting increase in the price of goods and services would lead to reduced purchasing power, thus real wages are affected negatively.

Regressive impact on nation's most vulnerable. Low income households will suffer more so than middle class households because of their reliance on cheap energy and products. Additionally, as mentioned, the costs of many consumer goods would be driven up, which combined with decreased purchasing power, would hit the nation’s most vulnerable populations the hardest.

 

Photo credit: VGM8383

 

 

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