House Resolutions Push Back Against Energy Taxes

This week, the House will take up two resolutions pushing back on policies slated to increase the price of energy. H.Con.Res. 89, introduced by Rep. Scalise, expresses the sense of Congress that a federal carbon tax would be detrimental to the economy. H.Con.Res 112, sponsored by Rep. Boustany, similarly disapproves of the Obama administration’s plan to levy a $10.25 per barrel tax on oil.

Both resolutions mark an important opportunity for Congress to take a stand for affordable and reliable energy. It is key that Representatives vote yea on both H.Con.Res. 89 and H.Con.Res. 112. It is not enough to vote for one or the other. Both resolutions deserve support from those who believe in the importance of affordable, reliable energy.

Over the last eight years, the Obama administration has worked to implement a policy agenda squarely aimed at suppressing the domestic production of oil, natural gas, and coal, in favor of more expensive and less reliable energy sources. This “keep it in the ground” campaign advocates for economically damaging policies that ignore the significant and very real costs of cutting off access to our most abundant and affordable energy resources. Fortunately, Congress has met this campaign with opposition, as evidenced by the defeat of cap-and-trade legislation in 2009 and the lifting of the oil export ban in the 2015 omnibus spending package.

However, regulatory threats to accessible and abundant energy continue to mount. Carbon tax advocates continue to try to drive up energy prices for American families. So far in this session of Congress, at least four bills have been introduced that include some form of pricing carbon dioxide emissions. However, carbon tax proposals continue to fail to gain significant Congressional support, at least in part due to the high costs associated with such a policy. Sixty-six percent of American electricity is generated by natural gas and coal. A carbon tax will jack up electricity rate by requiring utilities to pay for the emissions associated with power production. These costs will be passed onto consumers in the form of higher power bills. Further cost increases will come at the pump, as gasoline and diesel prices will go up. In 2013 the Congressional Budget Office determined that a carbon tax “would have a negative effect on the economy” by damaging purchasing power, reducing employment and overall economic output.

A carbon tax is also a naturally regressive tax, meaning the hardest hit would be low income families. According to census data, families making less than $10 thousand per year spend nearly 70 percent of their after-tax income on energy, while those between $10 thousand and $30 thousand per year spend over 20 percent on energy. Conversely, those making over $50 thousand per year only spend 8 percent of their after-tax income on energy. A carbon tax disproportionately hurts those who can least afford it.

Even if implemented, a carbon tax would do essentially nothing to accomplish its stated goal of combating a global temperature rise. A study by the Cato Institute found that even if the U.S. were to reduce all carbon emissions linearly by 2050, the average global temperature would be reduced by a mere 0.1 degree Celsius by 2100.

Closely related to a carbon tax is the Obama administration’s idea of placing a $10 per barrel tax on oil. While many of the logistics of the plan remain vague, such as where in the production chain the tax is levied, revenues of this tax are meant to be spent on energy subsidies for wind, solar, and other expensive sources. Aside from being a pure wealth transfer, this policy would significantly strain on domestic oil producers, put the American economy at a severe disadvantage, and hurt American families, all to line the pockets of renewable energy investors and developers who already receive significant federal funding. The tax is slated to raise the price of gasoline by $0.24, as well as impact other petroleum products and goods and services reliant on transportation fuels (read: almost everything). The Congressional Research Service determined this tax “would likely result in decreased discretionary consumer purchasing power which may translate into lower expected economic growth.” While the proposal itself is a nonstarter for Congress, the fact that it has been floated is concerning and dangerous. This policy will not be implemented by the end of President Obama’s tenure, but could easily be revived in subsequent administrations.

The mere prospect of these policies being put in place necessitates a strong rebuttal from Congress. Fortunately, Rep. Scalise and Rep. Boustany have taken the lead on fighting back against policies that drive up energy costs. These sense of Congress resolutions provide a key marker for Representatives to vocally oppose such taxes. This is an exercise in accountability, and Representatives who value affordable and reliable energy should be encouraged by those opportunity to put their name behind these resolutions.

It is imperative that Representatives not bifurcate their vote on these two resolutions. Simply put, it is not enough to vote on either the Scalise or Boustany resolution and not the other. Both resolutions deserve a strong showing and are intrinsically linked. There is absolutely no reason to vote yes on one and not the other. Splitting votes between these two resolutions is a disservice to the American people, who deserve to know where their elected Representatives stand on these important issues.

By opposing any new energy taxes, lawmakers can send a clear message to their constituents that they’re against burdensome and damaging policies designed to increase the cost of energy. We applaud Rep. Scalise and Rep. Boustany for spearheading these initiatives and strongly encourage all Members of Congress vote yes on H.Con.Res. 89 and H.Con.Res. 112.