In a clever bit of sleight of hand, a guest columnist last week urged readers to support a pernicious proposal by the California-based Citizens Climate Lobby that would raise consumer costs on all forms of carbon-based energy. The clever bit is this: they promise a monthly “dividend check” is going to arrive to return the money raised by this tax to “each person in the U.S. to help us pay for the increases the oil companies would pass on to us, the consumers.”
Part of the reason for this effort, according to the proposal, is to offset the “true costs” associated with carbon fuels, specifically “health care, drought, flooding, severe storms, agricultural disruptions and rising ocean levels.” So if I read this right, consumers would get a rebate from the increased tax paid by petroleum producers, and this rebate would partially pay for our increased energy costs plus the health care and environmental costs the columnist attributes to the carbon-based energy sector.
We are encouraged to lobby Congress to raise energy taxes, then return the money to us to offset those raises. As President Reagan said, “I know if I keep digging I’ll find a pony in this pile of manure.”
Here comes the kicker: as the cost of carbon-based energy climbs, consumers are going to move to solar and geothermal energy, benefiting Nevada’s economy. What’s not to like about that win-win situation?
Here are some things not to like:
1. Raising the cost of carbon-based energy will affect a lot more than gas prices at the pump, or natural-gas-generated electricity. Food prices will go up as the cost of transportation and fertilizers climbs, government services will cost more, even the cost of solar energy will go up as silicon-cell producers absorb higher petroleum costs. And this is just a partial list of increased consumer costs.
2. Rebating “some” of the marginal cost of petroleum products means we’re not getting back all the additional cost we incur. And sharing the rebate “with each person in the U.S.” means some people would be getting rebates even though they don’t consume petroleum, further reducing the amount of the rebate consumers would get. Bottom line: you’ll pay more for energy and anything that needs energy in its production or distribution.
3. The burden of collecting and “sharing” this tax will cost money, which presumably will come out of the tax, so even less will be coming back to consumers.
4. Taxing carbon-based energy producers will have absolutely zero impact on drought, flooding, or severe storms. As for rising oceans, Obama told us seven years ago he’d stop that. Are you telling me he didn’t?
5. The opportunities for graft and cronyism under such a proposal would be enormous because the energy sector is large and well funded. If such a bill were to pass, lobbyists would be breaking down doors in Congress and explaining how their particular part of the industry should be exempt because they do a lot of business in the Representative’s district, clean up after themselves, and oh by the way, could the Congressman’s family use a free trip to Disney World? On our corporate jet?
6. We have already seen how the IRS and EPA can be used for political ends: do we want to spread this opportunity to tax collection associated with energy? The prospects are endless!
There are many more reasons not to like this, but readers get the point: this proposal has huge unintended consequences.
I’m going back to looking for that pony.
Fred LaSor retired from the Foreign Service to the Carson Valley. He lives there with his wife and her horses.
