The tax hike that could smother Democratic incumbents in 2022
Buried within the Democrats’ sprawling Build Back Better proposal was a tax masquerading as a fee pretending to be a solution to global warming.
And it will hit most Americans right in the wallet:
The bill slaps an escalating tax on methane emissions by oil and gas producers that will reach $1,500 per ton by 2025. The fee is meant to be President Biden’s contribution to the recent Glasgow vow to reduce global methane emissions 30% by 2030. The tax is estimated to raise $8 billion over 10 years.
Producers will naturally pass the cost of the tax along to customers. Some 180 million Americans use natural gas to heat homes and run appliances, while some 5.5 million businesses use it to run their workplaces and manufacturing facilities.
Even without this new tax, the Energy Information Administration (EIA) is warning that about half of U.S. households that primarily heat with natural gas will pay 30% more this winter than they did a year ago—50% more if this winter is cold. The American Gas Association estimates the methane tax could add another 17% to an average customer’s bill.
So much for that Biden promise not to raise taxes on those earning less than $400,000 a year. That was always a stretch – if not an outright lie. But it could have been even worse:
The methane tax is [Democrats’] latest stealth enforcement hammer. Once the tax is in place, it will be easy to raise over time, further squeezing producers. The Administration is also planning to issue new methane regulations. The combination would make oil and gas producers the first industries subject to federal taxes and regulation for a greenhouse gas. Industry groups are warning this tax could also result in the loss of tens of thousands of jobs.
Sen. Joe Manchin’s opposition to the BBB saved Democrats from having to justify this tax on the 2022 campaign trail.