Printer Friendly

CMS ENERGY CORP. EXECUTIVE WARNS AGAINST BROAD-BASED ENERGY TAX PROPOSED BY CLINTON ADMINISTRATION

 WASHINGTON, March 3 /PRNewswire/ -- A broad-based energy tax as proposed by the Clinton Administration could have a chilling effect on the recovering economy by raising the price of exported U.S. goods and eroding America's competitiveness in the global market, an executive of the Dearborn, Mich.-based CMS Energy Corp. (NYSE: CMS) warned Tuesday.
 "Taxing energy used in the production of domestic goods would worsen our economic competitiveness around the world," said Senior Vice President John W. Clark. "U.S. exports would drop because our products would be more costly in foreign markets. At the same time, imports of finished products would rise because the energy used to manufacture foreign-made goods would not be subject to such a tax."
 The net result, he said, would be an increase in the U.S. trade deficit, probable job dislocations in energy-intensive industries and the relocation of some industries outside the country.
 The total effect, Clark said, would be contrary to the administration's goal of job creation and long-term economic growth, which would be driven by the country's success in increasing its exports.
 He noted that a recent Congressional Budget Office estimate shows that just a 1 percent in gross domestic product between now and 1997 would achieve more than half of President Clinton's goal of slicing $145 billion from the deficit by 1997.
 "This cannot be achieved," he said, "if U.S. exports decrease because of this kind of energy tax which imports would not have to pay."
 Clark said the so-called Btu tax would also discriminate against energy-intensive, heavy manufacturing states like Michigan, which alone faces an annual energy tax bill increase of about $2 billion under the plan.
 Additionally, he said, low and fixed income individuals would suffer because they would be forced to spend a larger percentage of their disposable income on home energy costs.
 "I am afraid the only alternative for low income households would be to go without essentials in many cases -- to face the choice of heat or eat,'" Clark said. (See attached chart showing total consumer cost of the proposed energy tax.)
 He said that if new tax revenues were needed, a broad-based consumption tax on all but essential goods and services such as food, medicine and heating costs would be better than an energy tax -- such a levy would not burden U.S. exports while benefiting foreign imports and would be less regressive than an energy tax.
 CMS Energy Corp. is a $3 billion (sales) diversified energy company with businesses engaged in the distribution of electricity and natural gas, interstate storage and transmission of natural gas, oil and gas exploration and production, independent power generation and utility services. CMS Energy Corp.'s principal subsidiary is Consumers Power Co., Michigan's largest utility and the nation's fourth-largest combination electric and gas utility.
 ENERGY & CONSUMPTION TAX OPTIONS
 Btu Carbon Oil Import
 Harm to global
 competitiveness High High High
 Impact on low/middle
 income taxpayers High to High High to
 moderate moderate
 Discriminatory
 regional impact High to moderate High High
 Environmental
 benefits Moderate High to Moderate
 moderate
 Gasoline VAT Consumption
 Harm to global
 competitiveness Low High (unless Low
 rebates for
 exports are
 given)
 Impact on low/middle
 income taxpayers High to High Moderate
 moderate
 Discriminatory
 regional impact High to High to Low
 moderate moderate
 Environmental
 benefits High Low to Low to
 moderate moderate
 CONSUMER COST OF PRESIDENT CLINTON'S ENERGY TAX
 Tax Rate Annual Usage(a)
 Oil $3.47/Bbl x 6.24 billion Bbl = $22.0 billion
 Natural gas $.26/Mcf x 21 Tcf = $5.5 billion
 Coal $5.57/Ton x 910 million tons = $5.0 billion
 Nuclear and
 Hydro $.26/MMBtu x 10.5 Quads = $3.0 billion
 1997 Total Tax = $35.5 billion
 (a) Sources: DRI, DOE and others.
 -0- 3/3/93
 /CONTACT: Michael J. Brogan of CMS Energy, 313-436-9253/
 (CMS)


CO: CMS Energy Corp. ST: Michigan, District of Columbia IN: OIL SU:

JL-LS -- DE006 -- 2319 03/03/93 09:15 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Mar 3, 1993
Words:658
Previous Article:DRI/MCGRAW-HILL STUDY NAMES TOP 10 'CREDIT CARD FRIENDLY' STATES IN REGULATORY, LEGISLATIVE AND EMPLOYMENT SURVEY
Next Article:LAND ROVER SALES CONTINUE UPWARD TREND
Topics:


Related Articles
CONSUMERS POWER CHAIRMAN WARNS AGAINST ENERGY TAX
BTU ENERGY TAX WILL HARM THE ECONOMY, UNDERMINE CLINTON'S PROGRAM; NAM TELLS CONGRESS A VAT TAX WOULD BE SMARTER, FAIRER
MAPI QUESTIONS ABILITY OF CLINTON PACKAGE TO IMPROVE THE LONG-RUN GROWTH POTENTIAL OF THE U.S. ECONOMY
CMS ENERGY CALLS TAX FUNDAMENTALLY FLAWED
AMERICAN ENERGY ALLIANCE GEARS UP FOR RENEWED ENERGY TAX BATTLE AFTER CLOSE VOTE IN SENATE
Power move.
CMS ENERGY'S OIL & GAS UNIT NAMES RODNEY DYKES V-P OPERATIONS -- AFRICA
CMS Energy's Energy Marketing Unit Names V-P of Risk Management
Standard & Poor's Affirms CMS and Consumers Energy.
President of Consumers Energy Testifies in Support Of Electric Restructuring Bill.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters