Politicians Eventually Get It

The media has given a lot of coverage to the riots in France over the proposed increase in fuel taxes—a carbon tax. It has been pointed out that “ Macron is hardly alone in his frustration. Leaders in the United States, Canada, Australia and elsewhere have found their carbon pricing efforts running into fierce opposition.”

This most recent rebuff of a carbon tax should send a message to the delegates who are meeting in Poland for the annual Conference of the Parties to discuss climate change and make grand pronouncements about the end of the world and what we must urgently do to avoid it. Begin with recognizing that globalism is out of favor and not just in the US.

Delegates and other proponents would do well to go beyond the recent defeats of carbon tax proposals. If they look back over the past 35 years of so, they will see that there is consistent resistance to taxes on fuels no matter what they are intended to achieve or how the revenue produced is used. There has been consistent opposition to increasing the federal gasoline tax even though the Highway Trust Fund desperately needs more funding.

In 1983 the Greenspan Commission on Social Security recommended a 50 cent per gallon increase in the gasoline tax to help fund social security. The reaction was swift and decisive. Opposition was broad and deep. Not only did motorists and the oil and auto industries oppose it but groups like the Coalition for the Homeless and groups running shelters also did. A large percentage of the homeless work and need their cars to get to jobs and shelters operate vans to pick up people to take them to shelters.

A decade later, President Bill Clinton proposed his infamous BTU tax on fuels as part of his first budget. it would have raised $70 billion over five years while increasing gasoline prices less than 10 cents a gallon. Unfortunately for the President, it was clear that the BTU tax was really aimed at petroleum based fuels because coal was given a break to get Senator Byrd’s support. In less than 3 months, the President surrendered because opposition in the Senate was overwhelming.

Since then, Al Gore, climate change advocates, and their supporters in Congress have floated various forms of a carbon tax and each one has landed with a thud in spite of broad support from environmentalists and the economics profession. While a carbon tax is intellectually elegant to economists it has proven to be a political case of a deadly virus. The most recent incarnation is the Baker-Schutz plan that is being flacked by a group called the Climate Leadership Council. In spite of a promise to rebate the cost to citizens with monthly checks to everyone with a social security number, it has not gained traction in Congress.

The reason may be that a majority in Congress recall a variation of Lord Melbourne’s observation, “What all the wise men promised has not happened, and what all the damned fools said would happen has come to pass.”

Author: billo38@icloud.com

Founder and president of Solutions Consulting which focuses on public policy issues, strategic planning, and strategic communications.

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