Carbon Tax’s Costs on Economy Seen Exceeding Revenue Gain
A tax on carbon emissions would curtail U.S. consumption, investment and wages, limiting the ability of the levy to add revenue for the federal government, according to the National Association of Manufacturers.
The group in a report assumed a $20 a ton charge on carbon dioxide starting this year and then calculated costs with a rate of almost $1,000 a ton by 2053, and another with the rate relatively stable. The higher tax rate is needed to achieve U.S. goals of cutting greenhouse-gas emissions by 80 percent.
“Any revenue raised by a carbon tax -- under both carbon tax cases -- would be far outweighed by the negative impacts to the overall economy,” the Washington-based organization said today in its report.
Carbon-dioxide emissions since the Industrial Revolution have led to a warming of the Earth’s temperature, which threatens to cause extreme weather, drought and coastal flooding, according to the U.S. Global Change Research Program. Taxing a ton of carbon dioxide at $20 would raise more than $100 billion in the first year, according to research by the American Enterprise Institute, which says it backs policies to strengthen free enterprise.
Companies such as Exxon Mobil Corp. (XOM) say they support a carbon tax instead of federal regulations to try to combat the effects of climate change.
Jack Lew, nominee to be U.S. Treasury secretary, in written answers to questions posed during his confirmation by Senator Orrin Hatch, a Utah Republican, said, “the administration has not proposed a carbon tax, nor is it planning to do so.”
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