Truth in Global Warming – Mr. Dingell’s inconvenient tax.

By | July 9, 2007

Now, that's the way to clear a Capitol Hill hearing room. Americans are already miffed at paying $3 a gallon for gasoline, a fact that has the Members assailing oil companies on a daily basis. So the last thing Democrats seeking re-election want to do is pile on another dollar or two a gallon in taxes–especially in the name of "saving the planet" from the speculative danger of global warming 50 or 100 years from now. Their voters have to deal with the more immediate danger of missing the mortgage payment.

Mr. Dingell knows all this. His point is to force his colleagues–and the voters–to be more honest about the cost of their global-warming posturing. It's one thing to pay 100 bucks to hear Madonna at the "Live Earth" concert, or impress your girlfriend by wearing an "I reduced my carbon footprint" T-shirt. It's quite another to accept that energy prices would have to rise by many multiples to make even a degree's worth of difference to the world's climate. "I sincerely doubt that the American people will be willing to pay what this is really going to cost them," Mr. Dingell said on C-SPAN last week.

That's why most politicians prefer policy artifice that disguises the cost of raising energy prices. These policy tricks include higher automobile mileage standards and a "cap and trade" regime for swapping "credits" for carbon emissions. These schemes shift the direct costs onto businesses, which then pass them along indirectly to unwitting consumers. These policies still amount to taxes on energy use, but they allow politicians and green lobbyists to pretend that you can "save the world" for the price of a concert ticket.

They also impose more costs on some industries than others–the most notable losers being U.S. auto companies and their workers around Detroit. Mr. Dingell is sore, and rightly so, that the cost of indulging Nancy Pelosi's well-to-do San Francisco environmentalists on global warming would fall disproportionately on his blue-collar constituents.

As it happens, neither cap and trade nor higher fuel mileage standards would reduce emissions all that much, if at all. Most of Europe has been busting through its carbon limits under the Kyoto Protocol, while the mileage mandates imposed in the U.S. in the 1970s didn't stop Americans from purchasing SUVs and trucks. The only thing that has slowed those sales is $3 gasoline–thus the policy logic of Mr. Dingell's tax proposal.

Regarding such a tax, Democrats already have some hard political experience. In 1993, Vice President Al Gore convinced Bill Clinton to propose an energy tax on BTU (British thermal units) usage. That would have added about 12 cents a gallon to the price of gas. House Democrats walked the plank and passed it, only to have Senate Democrats kill it. As much as anything else, that vote cost Democrats control of the House in 1994. Now Mr. Gore has embraced the carbon tax once again–though we still haven't heard him endorse a direct tax on gas or consumers.

Speaking for ourselves, we don't favor a carbon tax. In theory, such a tax might make sense if it were offset by lower taxes on income tax rates and capital investment–which would be a net plus for economic growth. However, there's not a chance in melting Greenland that the current Congress would offset any new carbon taxes; it would merely pocket the extra revenue to permanently increase the government's share of GDP.

If Congressional Democrats are really serious about global warming, they'd nonetheless have the courage of their professed convictions: Take the Dingell honesty test and vote to raise carbon taxes. We suspect along with Mr. Dingell, however, that keeping Senate and House seats is going to trump saving the planet.

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