‘Cap and Trade’ is Really Just a Massive Tax

From the Wall Street Journal:

Who Pays for Cap and Trade?

Hint: They were promised a tax cut during the Obama campaign.

Cap and trade is the tax that dare not speak its name, and Democrats are hoping in particular that no one notices who would pay for their climate ambitions. With President Obama depending on vast new carbon revenues in his budget and Congress promising a bill by May, perhaps Americans would like to know the deeply unequal ways that climate costs would be distributed across regions and income groups.

Politicians love cap and trade because they can claim to be taxing “polluters,” not workers. Hardly. Once the government creates a scarce new commodity — in this case the right to emit carbon — and then mandates that businesses buy it, the costs would inevitably be passed on to all consumers in the form of higher prices. Stating the obvious, Peter Orszag — now Mr. Obama’s budget director — told Congress last year that “Those price increases are essential to the success of a cap-and-trade program.”

Hit hardest would be the “95% of working families” Mr. Obama keeps mentioning, usually omitting that his no-new-taxes pledge comes with the caveat “unless you use energy.” Putting a price on carbon is regressive by definition because poor and middle-income households spend more of their paychecks on things like gas to drive to work, groceries or home heating.

The Congressional Budget Office — Mr. Orszag’s former roost — estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That’s about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all five of them).

[...]

Cap and trade, in other words, is a scheme to redistribute income and wealth — but in a very curious way. It takes from the working class and gives to the affluent; takes from Miami, Ohio, and gives to Miami, Florida; and takes from an industrial America that is already struggling and gives to rich Silicon Valley and Wall Street “green tech” investors who know how to leverage the political class.

3 Responses to “‘Cap and Trade’ is Really Just a Massive Tax”

  1. Jeff E. Jared Says:

    Without cap & trade, how do we internalize the externality of pollution? Yes, doing this will raise the price of energy, but internalizing the externality makes it more of a market. It is a market failure when exernalities aren’t internalized, no?

  2. gracetime Says:

    Saving America. One community at a Time
    By Dan Stark 5-5-2009

    The more I think about it… Ron Paul is right most of the time… right along with his texas neighbor T Boon Pickens..

    When it comes to engy needs..
    However, most think the money Mongols, powers to be are going to selfishly keep what they have control of and thwart any movement to change the same..

    The election is over and we are forced to follow the trend once again! How do we break this cycle?

    That being said, I would like to share this open letter to T Boon as I think it discusses more deeply the situations as it applies to us in Kansas and the nation! Enjoy!

    As a Middle Class (or I was at least for a while) and a college educated Kansas native being raised in a southeastern Kansas community of Independence, Ks (that has history that reads like “Gone with the wind”, “State Fair”, “The Great Gatsby”, “Bus Stop” and my favorite.. “The rise and Fall of Rome”) it has occurred to me more than once that nothing really does change. Just the faces!

    Independence, Ks as it turns out grew from nothing to a city that generated more millionaires per capita during a short 10-year period in the early 1900s. Why a small community could do this is the lesson we all need to learn from. There was no gold. It was all based around cheap energy, natural resources and transportation.

    Oil was discovered at 600ft, and natural gas was so abundant that they just let it burn off.
    Plenty of water and several railroads crisscrossed the community. The conditions were right for just about any kind of manufacturing business that needed fuel for heat, water for process and methods to ship with. It was The Home of Sinclair Oil (ARCO) and the start of Phillips Oil and many others.

    More important here is that the abundance of cheap and plentiful energy generated more jobs and “lured in multitudes of entrepreneurs and businesses ” trying to take advantage of the cheap energy. All the ingredients were there. There were people back then that were so rich and arrogant that one in particular that I remember a story about lived out to the east of Independence about 5 miles.

    This family decided that the railroad would come to them and build a spur line to their plantation home site because of their importance and social location. So the family built a nice train depot to show the railroad their good faith and importance. This Depot location was at that time on a small plantation complete with servant’s quarters, grinding mill and Montgomery County Park. You know, Horse racing, gaming and special occasion events and what was at that time along popular old Osage Indian trails and not far from one of the original 3 trading post in Montgomery County, Ks.

    The depot and the arrogant families house to this day still stands, but the railroad never came. The mill is all but gone. The arrogant family forgot to consult with the railroad.

    People, as well as the lessons they have learned in life about any given thing, do on a regular basis go to their grave taking with them all of the experiences, failures and successes. That is of course unless they have taken measure to leave some kind of mark or memorable gesture to warn, educate or enlighten those who are next in line in this human chain of life.

    Trouble is we haven’t been doing much of the leaving behind lately. Unless you are talking about debt, habits of consumption and generally lax management styles that lead to out of control greed and incompetence.

    T Boon Pickens it seems has actually earned his right to be called a champion of logic and patriotism. He has certainly earned his right to be called wealthy. But the one thing that attracts me most to T Boon Pickens is his honest entrepreneurial approach to patriotism and solving the energy crisis. Yes I said crisis. What will happen to this great America and his hard work if he doesn’t create alarm and insists on change to insure the next generation of FREE Americans!

    It is not the purpose of this presentation to honor or pet T Boons ego. He doesn’t need that anyway! It is however, purposed to reinforce and agree with his direction with some reservations and corrections in his approach. He certainly has the right plan, if we want our freedoms preserved! Foreign Suppliers of energy are very close to doing what a trusted Nebraska financial institution did to me recently, just because they could.

    Trouble is, I am not sure we, as America, can do as I did and just pay the debtor off.
    Could we survive without the foreign outsourced energy sources? Pay them off and or just use our own energy resources.. We are not ready!

    If the foreign oil and energy sources decide to force the price of oil and energy to the point of crippling our way of life, and it could at any time, I believe we will be slaves to the energy needs we ourselves have created!

    I sometimes wonder who it is that is making some of the life changing laws, energy decisions and outsourcing our jobs! Didn’t we elect these fools? Why is it we have to beg them to take care of us in the not so rich group of Americans?

    People in the blue-collar class are frightened! Including me! And the Washington academic elite has no idea of the magnitude of this popular distrust or the realities of how many at the grass roots level are affected and concerned.

    When this same Washington academic elite group discovered recently that the ammunitions supplies were being bought and stock piled at enormous rates, they seemed to be confused! Immediately they tried to blame this activity on some kind of conspiracy or right winged radical movement.

    It (to them) had to be something from far right radicals that threatened the Washington Elite government. But wait, isn’t it the Washington academic elite that is supposed to be working for the people? To secure the American way and to be certain the USA is vibrant with jobs, solvent and supplied well with all necessary means to do the same? Who is missing the boat here?

    If they did understand, there would be no need for alarm or international lobbyist.
    The real fear should be that the American public, not the far right, has real concerns about who is actually running the show!

    So why are the Washington academic elite and our electorate who is supposed to be working for the people alarmed??

    Who does your elected and appointed representatives really work for?
    You, the bureaucrats or is it the highest power broker bidder?

    Observation, research and debate will usually provide many alternative choices for solving any problem.

    “On a level playing field even a blind hog can eventually dig up an acorn”. But what if it isn’t a level or fair playing field. These days, most of the thinking population has already come to the conclusion that the field isn’t anywhere near level or fair. We in the thinking population have all come to the conclusion it is time to “castle Up”. A term used in the game of chess for creating that last important high wall defense for defending against what is most probably coming down the track. Straight at you!

    Be careful. It is the headlight of a train of events threatening your right to a middle class lifestyle and even your human right of a comfortable existence!

    If you haven’t seen that headlight steaming down this track straight at you.
    Aiming for you, your children’s future and even your right to control your very own USA constitutional rights. Then you are either blind, deaf to the noise around you or you have been consumed by the media distractions that seemingly are paid to misdirect, misinform and promote agendas for the “Worlds powers to be”. Money talks! Philosophy walks! Fears drive the herds and the Managers shear and harvest the human flocks repeatedly!

    Let me explain this in more common terms.

    In April of 2009, I received a letter from a prominent Nebraska financial institution that I had partnered with for many years. On the credit card I used with them I had accumulated 70,000 air miles credits.. (That is a lot of business transactions). Now mind you I was carrying a $15,000 dollar balance on the card. Probably a little high but I had never missed a payment, never been late and my credit score was in the high 780s (which is excellent).

    Out of the blue for no reason that has ever been explained to me other than what was printed in the announcement, the financial institution that I previously had full faith in decided to include me in a program that raised the interest rate on that account to 17%.
    I guess I looked to be a great target for profit taking. This was almost a 4% increase from an already to high rate that I didn’t like. This increase would upset my monthly cash flow budget and be very costly both in the short run and the long run! But this solid financial institution had never done anything stupid in the past and the credit line was acceptable. So I had to ask myself, Why raise the rates now, And Why Me?

    Because they could! And they did!

    I immediately paid off the account, But didn’t close it! I wanted them to see the account information monthly and the lack of activity from this date forward. I wanted to send a signal to them, so they will know and understand they have hurt their steady business from an old customer and know they are not playing with 4 year olds!

    When it comes to old reliable sources we use every day, it seems we need to take care!

    We as a nation need to ratify a plan to start laying out directions to solve this immediately. Perhaps we should learn from our past history.

    In Kansas, We have wind power in the western part of state but limited water and employment base. In the Southeast We have natural gas, water and some oil refinery and plenty of educated employment base. We have plenty of water in the Eastern part of the state. And in the Northeast we have (it seems) it all! Our highways are some of the best and rails run everywhere! So why are the jobs going away?

    In several areas of the state if we were to ship these basic resources to a common area where they are needed (call it newly strategically located enterprise zones where the resources could be shipped to and positioned) there might be an explosion of opportunities. Think about the Wal-Mart distribution system and why it works so well.

    Now the big money wants to build Coal, wind and other energy plants and ship the energy out of the state to everywhere else. We want to keep all the water in the East
    And we want to keep all the real job opportunities in the major metros. Control, resource availability and profit are the key words!

    We have junior colleges, 4-year colleges and trade schools that produce some of the finest educated people in the world! And can with a little notice regroup to train the youth and unemployed for the new technologies and opportunities. However, for whatever reasons, we resist changing our paths and beliefs for using these new resources in a new way.

    I am sure there are hundreds of arguments for doing so.

    Somehow, I thought it was Kansas that needed the jobs and tax base. Doesn’t it make sense that if we produce the reasonable costing energy, then, why shouldn’t we use the same to create enterprise zones within the state of Kansas WHERE the Opportunities are needed? I know there are some in existence now. However, let us step back and re think these new opportunities and re evaluate how to use what resources we already have.

    With all these new resources coming on line, doesn’t it make sense to invest in ways to transfer these new sources of energy to areas in KANSAS that need them most? Make available for aspiring entrepreneurs and outsourcing companies the very things they are looking for to use. It must be this kind of thinking is much too easy and practical to be considered! Or perhaps based on old accounting, taxing and political experiences it doesn’t seem reasonable. We actually know we can fail! Thus the negative stance!

    Why are we not creating the solutions right here in Kansas? WE HAVE all the resources!
    Why isn’t the Kansas or other state governments taking lead with there own energy plans? Here is the answer to Why? Our electorate and appointed Bureaucratic management do as they are told!

    Most are not business people. They are populist, legalist and politicians that usually cannot see the business sense nor have the visions to know the correct directions. This is why they rely so heavily on contributions and knowledge from outsiders. And this is how the outsiders get in!

    But ask yourself, Who Is telling them? And whom are they listening to? If you don’t care or pay attention, then don’t be surprised when that train hits you and your children head on!

    You can make a difference! Get involved! Think this over and the light bulb will come on!

  3. sac burberry pas cher Says:

    When alive ,we may probably offend some people.However, we must think about whether they are deserved offended.

Leave a Reply