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A Carbon Tax Makes the Democrats' Overspending Problem Worse

A carbon tax would have a negative ripple effect across the economy

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By Christopher Prandoni

, Federal Affairs Manager of Americans for Tax Reform

December 10, 2012

About Christopher Prandoni:

Christopher Prandoni serves as a federal affairs manager of Americans for Tax Reform and handles energy policy for the organization.

After Democrats spent the past four years creating trillion dollar deficits, they are now asking the American people to foot the bill. Even with Obamacare's trillion dollar tax hikes set to kick in on January 1, Democrats are still telling the American people that they are undertaxed.

Creating an entirely new revenue stream, a carbon tax would be a boon for Democrats looking to sustain inordinately high levels of federal spending. While many carbon tax proponents argue for a "revenue-neutral" carbon tax—where the federal income tax or payroll tax is reduced by an identical amount—such a bill is unlikely to ever emerge from the halls of Congress. Even if an ostensibly "revenue-neutral" carbon tax were to become law, it would only be a matter of time before tax and spend politicians ratcheted up the carbon tax, payroll tax, and income tax. Opening up another front in the battle to restrain growth of government would be disastrous.

[See a collection of political cartoons on energy policy.]

With the economy crawling along at 2 or 3 percent growth and the unemployment rate stuck around 8 percent, a carbon tax would only exacerbate our economic hardship.

Knowing this, Republican Sen. David Vitter of Louisiana and Republican Rep. Mike Pompeo of Kansas just introduced a resolution opposing a carbon tax. Highlighting the undeniable damage a carbon tax would have on the American economy, Vitter and Pompeo write:

Energy costs affect the price of every product. Because a carbon tax would jeopardize the affordability of the most widely used and available energy sources, the result would be a ripple effect across the economy that would increase the cost of consumer goods for all Americans while simultaneously decreasing the competitiveness of America's global exports.

[See a collection of political cartoons on the economy.]

Luckily for the American people, congressional Republicans have rejected a carbon tax. Senate Minority Leader Mitch McConnell of Kentucky sponsored the Vitter resolution and House Energy and Commerce Chairman Fred Upton of Michigan is introducing his own resolution opposing a carbon tax.

Enabling Democrats' penchant to overspend through a carbon tax revenue does nothing to address the problem at hand—America has an overspending problem.