Business Says an Energy Tax Will Cost US Jobs, Jobs, Jobs

PRESIDENT Clinton promised "jobs, jobs, jobs" during the campaign, but several major United States industries claim that thousands of jobs are threatened by his call for sharply higher energy taxes.

US airlines, which lost $4.5 billion in 1992, figure Mr. Clinton's new levies on jet fuel will buffet them with $1.4 billion a year in new costs. The result could be more layoffs and canceled orders for new aircraft.

Farmers expect energy expenses under Clinton's plan to climb by an average of $1,600 for a typical grain farm. Profits could shrink. Food costs could rise. Sales could drop.

Manufacturers of recreational vehicles, power boats, and other expensive equipment fret that their recession-hit industries will be dealt a severe blow just as they saw signs of recovery.

Vice President Al Gore Jr. says the energy tax package was designed with several goals in mind. At a Monitor breakfast Feb. 18, he told reporters that it will reduce pollution, discourage overreliance on imported oil, encourage use of natural gas, increase energy efficiency, and raise revenue.

But Charles diBona, president of the American Petroleum Institute (API), counters that Clinton's taxes, by singling out energy, "would seriously harm economic recovery and be a job-killer on a mammoth scale."

Mr. diBona says API studies show the energy tax "would reduce the nation's gross domestic product by some $170 billion and cost Americans 600,000 jobs."

Complaints from US businesses contrast sharply with the praise heaped upon Clinton's plans by environmentalists and energy conservationists, who share Mr. Gore's optimism.

"We're impressed," says John DeCicco, an analyst with the American Council for an Energy-Efficient Economy. "This represents a paradigm shift in energy policy. It is the first time taxes have been ... justified in terms of energy consumption and environmental impacts."

Jane Perkins, president of Friends of the Earth, says the new taxes will lead to a healthier environment, while reducing America's dependence on foreign oil.

The Clinton tax would touch every American, and some industries clearly will be hurt.

The tax would be imposed on virtually all fuels - oil, coal, natural gas, nuclear, hydro. For electricity generated by those sources, the cost would be passed along. Some renewable fuels would be tax exempt, including wind, solar, and geothermal.

The tax would be calculated on the heat content of fuels, as measured in Btu, or British Thermal Units. A Btu is the amount of heat it takes to raise the temperature of one pound of water by 1 degree Fahrenheit. The new tax would be 25.78 cents per million Btu, except for oil, where it would be more than twice as much, 59.9 cents. The Btu tax will drive up the cost of a gallon of gasoline by 7.5 cents, and a gallon of heating oil by 8.3 cents, Dr. DeCicco estimates.

The White House says the energy tax will cost a typical household about $10 a month, though critics claim it would be more. It will raise direct energy costs for fuels, but will also boost indirect costs for things like airline tickets, fertilizer, and food.

In the first few days after Clinton revealed his plans, it was much easier to find critics than supporters of the Btu taxes.

Charging discrimination against their oil-dependent region, New England fuel dealers say northeastern businesses like lumber and fish processing would operate at a competitive disadvantage with nearby Canadian provinces.

BOB STRAWN, president of the Recreational Vehicle Dealers Association of North America, claims his industry could lose 20 percent of its workers because of higher gasoline taxes.

Gore, defending the plan, says it was designed to favor natural gas, most of which is produced in the US, while discriminating against oil, nearly half of which is imported. "That's good for our country," he says.

Ed Merlis, senior vice president for external affairs at the Air Transport Association, says there is no alternative to oil for his industry. "We can't carry coal in airplanes to run our engines, and hydroelectric doesn't work too well at 36,000 feet," he says.

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