PTF Signs Letter Asking Congress to Oppose the PROVE IT Act

June 14, 2024

Last week, Power The Future was proud to join 40+ organizations in signing a letter to Congress asking members to oppose S.1863, the PROVE IT Act. This is timely as the House of Representatives will likely introduce their own version of the bill soon. The bill opens up a path for the first carbon border tax. 

The letter explains,

“The PROVE IT Act requires the Department of Energy to collect, analyze, and regularly update data on the carbon intensity of domestic and foreign goods. Through the creation of this federal administrative framework, Congress would be removing one of the biggest obstacles to the imposition of carbon taxes on both imported and domestically produced goods. It is clear that this information would then be used to impose new “climate” taxes, similar to what Democrats in Congress did during the summer of 2022. In the Inflation Reduction Act (IRA), which no Republicans supported in either the House or the Senate, Congress took information collected under the EPA’s greenhouse gas reporting program and imposed the first- ever federal methane tax. The Senate passed the IRA on a 51-50 party-line vote with Vice President Kamala Harris casting the tiebreaker.”

The letter outlines four reasons why lawmakers should not support the PROVE IT Act. Including, massive new taxes, punishing energy use, hurting the poor and embracing the EU’s extreme climate policies. All of these things would harm our energy sector. Now more than ever we need to be lifting up American energy workers. We hope Congress takes a good, long look at the PROVE IT Act and ensures this bill does not see the light of day.

The full letter can be found below:

June 3, 2024

Dear Representative:

Since a House companion to the PROVE IT Act (S.1863) may be introduced soon, the undersigned organizations want to express our strong opposition to this pro-tax, anti-energy legislation that will lead to both a carbon tax on imports and a domestic carbon tax.

The PROVE IT Act requires the Department of Energy to collect, analyze, and regularly update data on the carbon intensity of domestic and foreign goods. Through the creation of this federal administrative framework, Congress would be removing one of the biggest obstacles to the imposition of carbon taxes on both imported and domestically produced goods.

It is clear that this information would then be used to impose new “climate” taxes, similar to what Democrats in Congress did during the summer of 2022. In the Inflation Reduction Act (IRA), which no Republicans supported in either the House or the Senate, Congress took information collected under the EPA’s greenhouse gas reporting program and imposed the first- ever federal methane tax. The Senate passed the IRA on a 51-50 party-line vote with Vice President Kamala Harris casting the tiebreaker.

Many PROVE IT Act supporters have shown they seek a replay of the methane tax maneuver. In the Senate Environment and Public Works Committee markup of the bill, all Committee Democrats voted to kill an amendment that would have helped block the future use of reconciliation to use PROVE IT Act information to impose carbon taxes on either imported or domestically produced goods. Chairman Tom Carper (D-DE) opposed the amendment precisely because it “prohibits any revenue measure based on the greenhouse gas emissions associated with commodities or products.”

Many of the bill supporters expressly admit that the legislation would be used to develop carbon taxes of some kind. Senator Chris Coons (D-DE), a lead sponsor and a past sponsor of domestic carbon tax legislation has said the PROVE IT Act will inform the “process for imposing tariffs on countries that don’t have any transparency around their emissions” as “part of any border carbon adjustment mechanism.” The European Union (EU) has created the first and only carbon border adjustment mechanism and it includes both a carbon tax on imports and a domestic carbon pricing scheme.

Once a carbon tax on imported goods is created, the U.S. would inevitably impose a domestic carbon tax. This is due both to trade law obligations and because environmental groups and others would not stay silent as domestic industries fail to meet similar greenhouse gas reduction commitments. Also, most domestic manufacturers would oppose a domestic carbon tax absent a corresponding tax on imports to “level the playing field.” Enacting the corresponding tax on imports would therefore weaken industry opposition to a domestic carbon tax.

The U.S. House recently passed a bipartisan resolution opposing and explaining the many harmful effects of domestic carbon taxes (H.Con.Res.86). The PROVE IT Act would help to make those harms a reality.

We find it very concerning that legislators would support a bill that would lead to:

Massive New Taxes. It’s not just a domestic carbon tax that would inflict financial pain on Americans. The burden of a carbon tax on imports would primarily be borne by American businesses and consumers. It acts as a domestic consumption tax.

Punishing Energy Use. Since more than 80 percent of the world’s energy comes from coal, natural gas, and oil, which produce carbon dioxide emissions, carbon taxes are taxes on the energy that make modern life possible. Put more simply, a carbon tax is a tax on modern life.

Hurting the Poor. All Americans would suffer through higher prices due to these taxes. This would always be harmful, but it’s especially harmful now as the United States suffers through years of inflation. Higher prices due to carbon taxes, especially to meet basic needs, would have a disproportionate impact on low-income households.

Embracing EU’s Extreme Climate Policy. Instead of fighting and rejecting the EU’s disastrous climate policy, the PROVE IT Act embraces what the EU is doing. Many supporters advocate for a carbon border adjustment mechanism and seek to create a “carbon club” of countries that join together to impose carbon taxes in some fashion.

Americans want affordable and reliable energy, not federal tax schemes that treat energy use as a sin. This bill though would lead to such taxes and is one of the biggest threats to energy and economic prosperity in recent memory.

Therefore, we strongly urge legislators to oppose the PROVE IT Act and ensure that it is not included, in any form, within other legislation.

Sincerely,

Daren Bakst

Director, Center for Energy and Environment

Competitive Enterprise Institute

Lisa B. Nelson

Chief Executive Officer

ALEC Action

John Droz, Jr.

Founder

Alliance for Wise Energy Decisions

Phil Kerpen

President

American Commitment

Kristen Walker

Policy Analyst

The American Consumer Institute

Thomas J. Pyle

President

American Energy Alliance

Hon. Jason Isaac

CEO

American Energy Institute

Margaret Byfield

Executive Director

American Stewards of Liberty

Richard Manning

President

Americans for Limited Government

Brent Gardner

Chief Government Affairs Officer Americans for Prosperity

Grover Norquist

President

Americans for Tax Reform

David T. Stevenson

Director, Center for Energy & Environment Caesar Rodney Institute

Ryan Ellis

President

Center for a Free Economy

Daniel Mitchell

President

Center for Freedom and Prosperity

Jeffrey Mazzella

President

Center for Individual Freedom

John Hinderaker

President

Center of the American Experiment

André Béliveau

Senior Manager of Energy Policy Commonwealth Foundation

Matthew Kandrach

President

Consumer Action for a Strong Economy

E. Calvin Beisner, Ph.D.

President

Cornwall Alliance for the Stewardship of Creation

Jerry Simmons

President and CEO

Domestic Energy Producers Alliance

Kristen Ullman President Eagle Forum

Craig Richardson

President

Energy and Environment Legal Institute (E&E Legal)

George Landrith President

Frontiers of Freedom

Cameron Sholty Executive Director Heartland Impact

James Taylor President

The Heartland Institute

Ryan Walker

Executive Vice President Heritage Action for America

Mario H. Lopez

President

Hispanic Leadership Fund

Gabriella Hoffman

Director, Center for Energy and Conservation

Independent Women’s Voice

Tom Harris

Executive Director

International Climate Science Coalition

Jon Sanders

Director of the Center for Food, Power, and Life

John Locke Foundation

Seton Motley President

Less Government

Charles Sauer President Market Institute

Brandon Arnold Executive Vice President National Taxpayers Union

Daniel C. Turner Executive Director Power the Future

Donna Jackson

Director of Membership Development Project 21

Paul Gessing

President

Rio Grande Foundation

Bette Grande

CEO and President Roughrider Policy Center

James E. Enstrom President

Scientific Integrity Institute

Karen Kerrigan

President

Small Business & Entrepreneurship Council

David Williams

President

Taxpayers Protection Alliance

Greg Sindelar

CEO

Texas Public Policy Foundation

Derrick Max

President and CEO

Thomas Jefferson Institute for Public Policy

Frank Lasee

President

Truth in Energy and Climate

Ben Zycher

Senior Fellow

*American Enterprise Institute

*Affiliation is for identification purposes only.