Tuesday, October 18, 2011

$37.6 Billion in Taxes

That's how much we Americans would be paying as a whole if the Federal Government charged kWh in taxes for every kWh used for all of the Residential, Commercial, Industrial and Transportation levels.  This is based on the total electricity usage of each sector over the 12 month period from July 2010 to June 2010, which is summarized below.

Now, in places like Wyoming, with the lowest overall electricity rates in the country in 2010, and especially in the Industrial sector with a 4.79¢kWh average, this tax would represent a 20% increase in the rate of electricity, but in places like Hawaii, with the highest overall electricity rates in the country, and with Residential rates averaging 28.1¢kWh, this represents a mere 3½%.

Currently there are no federal taxes at least on residential electricity usage.  So if the kWh tax was enacted, it would be the first ever tax on electrical usage at the national level.  And after all, $37.6 Billion is just a drop in the bucket in terms of federal spending.  None the less, it's money that could be used to pay for much-needed infrastructure improvements and given the balanced-budget oriented Congress, this would at least allow for the payment of some infrastructure projects which could include investments in solar, wind and geothermal power.

The main problem I see with this across-the-board tax is that like all flat taxes, it's in some ways regressive.  Where as the rich can afford to conserve and reduce electricity usage, lower-income folks won't be able to afford such modifications and so will end up requiring more and paying more for the same amount of service.  I therefore don't support such a tax as is but think this is a debate that we as a nation should have.  Much or the U.S. infrastructure, including even the electrical grid itself, is aging and passed it's original life expectancy.  We need to invest in the next 20, 30 and 50 years to keep America equipped to maintain its commercial edge.

Month Residential (MWh) Commercial (MWh) Industrial (MWh) Transportation (MWh) Other (MWh)
July 2010 155,553,653 128,192,270 84,809,418 658,253
August 2010 154,953,988 128,966,878 86,888,581 608,458
September 2010 125,769,782 119,324,357 82,676,592 628,120
October 2010 96,754,911 108,437,492 81,372,705 607,314
November 2010 93,170,152 101,398,996 78,804,962 595,314
December 2010 130,379,651 107,864,455 79,688,183 672,258
January 2011 146,430,729 107,907,906 78,933,839 696,590
February 2011 121,728,957 99,356,722 75,565,871 650,399
March 2011 105,476,318 103,550,741 81,262,696 657,024
April 2011 94,799,256 100,725,066 79,358,719 619,441
May 2011 98,306,883 107,068,609 81,574,661 620,181
June 2011 126,369,341 117,547,425 83,152,045 637,512

Source: the U.S. Energy Information Administration's Sales Revenue Spreadsheet (xsl).