OPINION:
Good news: American oil production has reached its highest point in two decades. The bad news, though, is when liberals see all that fossil fuel flowing, their first instinct is to tax it. For every innovator discovering new methods of propelling U.S. enterprise forward, there’s a big-spending Washington bureaucrat scheming to ensure Uncle Sam gets a cut. Lawmakers on Capitol Hill ought to shun plans to solve the nation’s financial woes with a levy on prosperity.
The Department of Energy announced Wednesday that U.S. oil production for the week ending Jan. 4 cracked the mark of 7 million barrels a day, its highest level since 1993 and 20 percent more than a year ago. The extraordinary boost has come in spite of government policy, not because of it. America’s new-found wealth of black gold is being tapped by horizontal drilling and hydraulic fracturing, or “fracking,” advanced extraction techniques that have opened access to previously unreachable shale oil reserves. This has put the United States on course to surpass Saudi Arabia as the world’s top energy producer by 2020.
Most Americans welcome this influx of fuel for the nation’s economic engine, but liberals don’t see it that way. For them, carbon-dioxide emissions from the use of fossil fuels are a crime against nature. (Carbon-dioxide emissions from the respiration of liberals and polar bears, on the other hand, are just fine.) The tax on carbon dioxide is meant to be a sin tax to reduce oil use, fueling big government instead of American industry.
Thomas Friedman argued as much in a Jan. 8 column in the New York Times: “When you think about how much financial debt we’ve built up in the market and how much carbon debt we’ve built up in the atmosphere, the wisest thing we could do as a country today is to start tapping on the brakes by both emitting less carbon to bend the emissions curve down and racking up less debt to bend our debt-to-GDP curve down.”
It is more likely that such a carbon tax would be counterproductive, reducing revenue flowing into the Treasury by slowing the overall economy. In a 2012 study, the U.S. Energy Information Administration outlined the devastating economic effects of a carbon-dioxide tax. A levy of $25 per metric ton would reduce income for a family of four by $1,900 by 2016 and result in average annual income losses of $1,400 through 2035. It would also increase energy bills by $500 a year and raise the price of gas 50 cents a gallon. The cumulative effect would add 1 million to the already swelling unemployment rolls. A smaller work force would mean lower tax receipts for federal coffers at the same time more people are hitting up Uncle Sam for unemployment benefits.
David Kreutzer and Nicolas Loris at the Heritage Foundation point out such an outcome would disproportionately impact lower-income Americans, who already must devote a greater share of their income to paying energy bills.
A carbon-dioxide tax would only harm them as it would harm America’s future. The long-sought goal of true energy independence is within our grasp. We shouldn’t let greedy politicians get in the way.
The Washington Times
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