Posted: 08/20/2007 | Author: H. Sterling Burnett
Should Congress consider universal energy tax?
Rep. John Dingell, D-Mich., has proposed a bold plan to fight global warming: an across-the-board carbon tax -- better known as a universal energy tax.
When Dingell first proposed the plan in early July, environmentalists were livid. They argued that he was trying to derail efforts by Speaker Nancy Pelosi and Rep. Ed Markey -- head of the House panel on climate change -- to implement higher corporate average fuel economy standards and proposed cap-and-trade legislation.
Dingell recognizes that carbon cap-and-trade proposals are merely backdoor taxes on energy use. As carbon-emission caps take hold, prices for energy and goods will increase, and some companies will fold. Because the tax is hidden, Congress would likely hold hearings into price-gouging and the villainy of oil companies, while avoiding all blame for the policies they foisted upon the nation. In the end, these policies will hurt the working poor, blue-collar laborers and those on fixed incomes, while doing little or nothing to prevent global warming.
The U.S. Energy Information Agency recently released an assessment of a Senate cap-and-trade proposal, which found it would cost the economy $533 billion, raise gasoline prices by about 41 cents per gallon, and raise electricity prices by more than 21 percent.
Dingell offers a different plan -- one that is bold, far-reaching, transparent and expensive. It would impose an across-the-board $100 per ton tax on carbon-dioxide emissions, a 50-cents per gallon tax on gasoline and end the mortgage tax deduction on all homes larger than 3,000 square feet.
I applaud his honesty. If humans are truly causing global warming and Congress can legislate a solution -- and I have my doubts on both counts -- they should be upfront about the costs.
Dingell's proposal would send the economy into a tailspin. But on the bright side, one sure way to reduce greenhouse gas emissions is to induce a recession, or better, an economic depression.
For that reason, Dingell's proposal has been pronounced dead on arrival by his own Democratic colleagues. They recognize that it would be political suicide to visibly hike the costs of energy at a time when consumers -- who are also voters -- are screaming for relief from high gas prices and for lower electric bills.
But, arguably, this is Dingell's point. There is no free lunch. Fighting global warming -- really fighting it -- will be expensive.
By making the costs transparent, Dingell is issuing a challenge: put up or shut up. If you believe climate change is a serious threat to human existence, then let's take the steps necessary to fight it. If Congress and the public are unwilling to pay the price, then perhaps they don't really think global warming is that big a threat.
If Pelosi and her allies have consciences, Dingell's proposal will either stiffen their resolve by giving them a serious, if still ineffectual, vehicle to tackle global warming, or shame them to ending their pretense. I'm not optimistic.