Report says carbon tax could slam trucking

| May 23, 2013
Click through the image to read the CBO's 20-page report.
Click through the image to download and read the CBO’s 20-page report.

Workers in “energy-intensive industries” such as truck transportation “would tend to experience comparatively large losses in income under a carbon tax because demand for their products [and services] would decline,” says a new analysis.

A bill proposing a tax on carbon dioxide emissions floated earlier this year in the United States Senate — opposed by most Republicans and some Democrats — was subsequently analyzed by the nonpartisan Congressional Budget Office. The analysis was requested by Rep. Henry Waxman (D-Calif.), the ranking member on the House Energy and Commerce Committee.

Depending on how the tax revenues are used, however, losses for energy-intensive industries could be offset in different ways. The report, which you can download here, primarily concerns itself with different scenarios for various carbon tax revenue uses and their potential impacts on the economy and federal budget:

1. If used to reduce the federal deficit solely, such a tax would initially harm the economy, increasing prices for consumers in a regressive fashion, with lower-income individuals affected disproportionately. It would, however, be effective in reducing federal budget deficits, which could hold positive outcomes for the economy long-term.

2. Used to reduced marginal tax rates for individual and business income in what the CBO calls a “tax swap,” however, the tax’s effect on economic output would be muted. “The net effect of a tax swap on output,” the report notes, “would depend on the relative sizes of the loss in output caused by the carbon tax itself (including both the primary costs and the tax-interaction costs) and the gain in output caused by the reduction in existing marginal tax rates.” Some analyses, the CBO notes, have concluded that “a tax swap could lead to a net increase in output” for the economy.

3. Distributing revenues to groups affected the most, the study found, would hold little utility for minimizing the broader economic impacts and could have the effect of actually incentivizing greater fossil-fuel use.

The CBO analysis also includes an effectiveness analysis relative to meeting the goals of a carbon tax — namely a reduction in emissions to prevent significant climate warming and potentially catastrophic outcomes.

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  • Coffeeclue

    Why would this hurt truckers? Transportation costs will go up and will be passed on to the consumers.

  • Spanky

    Carbon does not hurt the Atmosphere… All that stuff is a hoax!!

  • larry

    yes its just a way for gov to get more money from the consumer throw trucks consumers think trucks pay and thay don’t know its added to the cost of living and thay keep electing the same yoyos in office

  • Todd Dills

    Truckers are consumers, too, of course. So the effect of the tax without some offset on folks who use a lot of diesel would be felt doubly — the diesel would likely be more expensive, then of course everything else would given the corresponding likely rise in rates, which could offset things a bit, of course. The CBO’s contention that the effect would be felt largely there relies on a reduction in demand for trucking services. As we all know, though, rail won’t cut it for most transport needs, so you could well be right, ultimately.

  • Exforbrian

    this is coming from a Californian, they drive prius’s out there and they dont care what it will do to the rest of the country, they are only interested in the benefits it will bring to California. If you have a truck that gets 8mpg and you dont ever idle then you are good to go, if you are a company driver then you dont care, but I have 2001 trucks that get 6.5 mpg and that means I break even on the fuel surcharge, and if you have a CAT motor that gets 5mpg you are going to hurt really bad, as you are going to pay the most.. same with the cars, if you own a pick up then you are going to feel this tax more then the prius drivers.,. bastards in Ca. need to be run into the sea.. lets take the freight to the AZ CA border and let them drive out there in their pruis’s and pick it up..