Language for a new carbon tax bill in Connecticut is out, and there will be a hearing on the bill, No. 1064, starting at 11 a.m. on Monday, March 18 in Room 2B at the Legislative Office Building in Hartford.
The bill’s language is identical to that of bills proposed the last two years. It starts with a carbon tax of $15 per ton of carbon, increasing the rate by $5 per ton every year, forever. For details on the bill, please see the website. The tax will be assessed on all liquid fuels upon first import into the state, including heating oil, gasoline, diesel, propane and kerosene, and charged by wholesalers to retailers.
In addition natural gas and electric utilities will charge the tax to their customers directly. Fifty percent of the taxes collected will be rebated to consumers as a tax credit once a year, 45 percent to businesses, and 5 percent retained by the state for administrative purposes. Because the tax is imposed throughout the year, but only partially refunded once a year, there will be a cash impact on residents and businesses. Especially hard hit will be low-income residents.
Businesses are likely to pass on the tax during the year to customers, especially higher transportation costs from the tax. This will have an inflationary impact on all goods and services in the state. Also since a partial refund is offered to residents and businesses, they may be less inclined to stop or slow down purchases of fuels, gas and electricity, paying ever higher prices for these while receiving ever higher rebates. This is not only inflationary, but also will dampen the effectiveness of the tax in making people stop using fossil fuels.
In summary, the carbon tax is regressive, inflationary, ineffective, and also destructive in that it will drive people and business out of the state. If you are interested in testifying, or learning more, please contact Chris Herb at chris@ctema.com by Friday.
