Republicans pushing tax hike? Midterm elections at risk if GOP joins Dems in carbon fee
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Republicans are rightly making inflation – especially at the gas pump – a big election year issue. So it will be eye-popping news to Americans struggling with skyrocketing prices to learn that a handful of GOP senators are working with leftist Democrats to make their pain even worse.
Specifically, these Republicans are collaborating with Senate Democrats to develop what they call a Carbon Border Adjustment Tax (CBAT) that would be applied to certain imported products that require fossil fuels in their production.
The tax would hit fertilizer, glass, petroleum, iron, coal, steel, pulp paper, aluminum and other materials required for agricultural, manufacturing and consumer products.
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This massive new energy tax would lead to higher costs for, well, just about everything for American consumers and businesses. It would be another blow to family and business budgets.
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It’s basic: by making fertilizers for farmers and raw materials for manufacturers more expensive, the CBAT will worsen inflation. Energy and high-tech expert Mark Mills of the Manhattan Institute correctly observes, "Any carbon tax would be inflationary, meaning this latest proposal couldn’t come at a worse time."
This was echoed by University of Chicago professor David Weisbach, an expert in carbon border taxes, who stated that it would "unquestionably" raise prices for American consumers.
Here’s another kick to consumers, farmers and businesses: if enacted, these new taxes, or "tariffs," on imported products and raw materials necessary for domestic manufacturing and agriculture will incentivize foreign suppliers to sell instead to other countries. Lower tariff-free prices will mean more sales for them.
The size of the levy would be calculated on the amount of emissions of carbon dioxide emitted on a country-by-country basis.
Such a diversion will mean more shortages – and higher prices for American producers – making the plight of farmers and manufacturers even worse.
The size of the levy would be calculated on the amount of emissions of carbon dioxide emitted on a country-by-country basis. In other words, the more emissions emitted in a country for the making of a particular product, the higher the tax on imports from that country.
Of course, estimating emissions that go into the production of particular products on a nation by nation basis is fraught with complexity. Does anyone believe countries like China and India, which want to sell raw materials to American manufacturers, will be forthright in providing data that could then increase the costs of their products? It’s silly.