Report shows trucking would suffer large economic loss to carbon tax

By CCJ Staff on

A report issued this week by the Congressional Budget Office says a carbon tax would cause industries that use much energy — like transportation — to “experience comparatively large losses in income” if a carbon tax were instituted spurred mostly by the decline in demand for trucking that would come from such a tax.

The report comes in response to a bill proposed in the Senate earlier this year that included such a tax proposal. Republicans mostly oppose the bill, but some Democrats do, too. The Congressional Budget Office is a nonpartisan organization and was requested by Rep, Henry Waxman (D-Calif.) to do the report.

The report does say that losses for “energy-intensive” industries like trucking could be offset in different ways, depending on how the revenue from the carbon tax is used.

The report says that if the revenue is used solely in an attempt to reduce the federal deficit, the carbon tax would initially harm the economy by increasing costs for consumers and in a regressive way, with lower-income individuals being affected more than others. It could be effective in reducing the deficit, though, which could produce more positive results in the long run for the economy.

If the revenue is used to lower marginal tax rates for personal and business income, the tax’s effect would be a wash, mostly depending on the size of the loss of output caused by the tax and the gain in output caused by the lowering of marginal tax rates.

If the revenue is distributed to groups that are affected the most by the tax, the economic impact wouldn’t really be minimized and the tax could actually encourage more use of fossil fuels, the report said.

Click here to download the report.

3 comments
tatertoter
tatertoter

The premise that this BOONDOGGLE is in ANY WAY DESIGNED to reduce the federal deficit, IS PURE FANTASY!

HOW LONG IS IT GOING TO BE TIL WE REALIZE our problem is with SPENDING!!!!!  NOT ENHANCING REVENUE!!!

Terry Jackson
Terry Jackson

At some point someone in a position of authority needs to stand up and make a call whether it hurts or not. What the general public will never understand is that the basis of our economy is strongly tied to the price of diesel.Everything we eat , put on or possess came to us through some source of public transportation. Let gasoline prices go where they need to, but for the sake of the economy put diesel back, way back ,to the point that trucking , farming, and construction can again become profitable. Is that fair, no, but we are learning by experience that a system of fairness eventually comes to ruin. True leaders are not intimidated by the outcry of the masses that fairness is not being implemented.That is actually what makes them leaders. If constructive measures are not taken soon, trucks will be parked and sold, construction projects put on hold or dropped all-together and if fields get planted they may not be harvested. Its time to wake up from the American dream. The rest of the world can see it happening, why can't we.

DOTDoctor
DOTDoctor

I can see this being passed on just like FSC.  The industry would have to recoup these costs in some matter.  The rental car industry is already doing so in a tax format in some states and a carbon offset environmentally conscience effort in others.  I can see the industry having a lane or mileage rate, FSC and carbon offset fee on their BOLs in the near future if this comes to pass.

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