Cap and Trade for Dummies

March/14/2009 19:00PM
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The Obama administration is determined to pass cap and trade soon. The faster the better because most voters have no clue what it is. It will be presented as a program to clean up the environment. 

It’s a tax. A tax to further income redistribution. A slick way to move closer to socialism. A take from the poor and give to the poorer. A pox on the blue collar worker. A bane on the energy generation states and a boon to the poor cities. 

The Wall Street Journal did the math. The states that would pay the most in cost to buy credits are : Wyoming, North Dakota, Alaska, West Virginia, Montana, Louisiana, Indian, Nebraska, Kentucky, and Iowa. This is based on per ca pita carbon equivalents in tons. Hardest hit would be working families. The 95% no new tax group. They would pay 3.3% of their after tax income  for the cap  and trade. Gee, too bad the Republican National Committee doesn’t read the Wall Street Journal. There might be a strategy there to try to get some working people to favor a party that doesn’t want to take 3.3% from this group in taxes. Maybe they could point out that this would break another campaign promise. Mr. Obama’s “making work pay”  tax credit of $525 billion that goes to people who don’t pay taxes will return $400 to individuals and $800 for families won’t cover the carbon tax, especially in high carbon use states. 

So, the government will make carbon emitters buy credits. They will raise prices. The consumer will pay the extra cost for power. The government will redistribute the money back, but it will not cover the tax credit. 

Will less carbon be emitted. Maybe, maybe  not. But, more taxes will be collected and returned to people who don’t pay taxes. 

Sounds like a tax, looks like a tax, smells like a tax. Must be a tax.

It won’t be called a tax, it will be called environmental cleanup.

Just another little while lie from Washington. Who cares, I do, and you should too. 

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Comments (4)

  1. Chris Johnson says:

    <<So, the government will make carbon emitters buy credits. They will raise prices. The consumer will pay the extra cost for power.>>

    First, your comment here should have been "The consumer will pay the extra cost for carbon-based power." If you’d have written that, you’d have been right.

    Second, my comment is GOOD! That is the point… to raise the price of carbon based power so that the market will innovate and provide lower cost (and presumably cleaner) alternatives.

    Currently, the overall cost of carbon based power is not borne by the consumers of that power. Cap & trade is a market based attempt to fix that problem. If you want to call it a tax in order to further your political aim of maintaining the status quo, please feel free. But by this logic, you could have called catalytic converters a new tax on cars. There is no doubt that the addition of catalytic converters added to the cost of a new car. But this addtional equipment also has resulted in cleaner air. The cost of returning the air to it’s original state (i.e. before it got sucked into the car’s engine) is now more appropriately borne by the car’s driver.

    The proposal to use some of the revenue generated by cap & trade to lessen it’s impact on the poorest among us is good. But, even at the lowest income levels, we shouldn’t want to completely wipe out it’s impact. Even among this group, I want there to be some impact so that the incentive for change still exists among this group.

    Most Americans agree that we have a problem with global warming… perhaps not most that read this blog, but most Americans overall. Cap and trade worked very well with the problem of acid rain. There is no reason why it can’t work on this problem too.

  2. Bill Robertson says:

    Ethanol was supposed to reduce our dependence on foreign oil and clean up the environment. But, knock sensors fixed the problem making ethanol redundant for environmental purposes. And, foreign imports are up. And, food prices went up. And, your tax dollars to support the cost difference between ethanol and gasoline went up. Gee, I guess it was a political deal all along to get the farm vote.

    How, shocking. Our leaders would tout a net energy loss product to gain votes. With Cap and Trade the hope is more people are like you than me. If the majority of the public sees it for what it is, a tax grab. lot’s of your Democratic political friends will be running for cover. I guess 9 Democratic senators don’t think they call make the scam work, since they plan to vote against it.

    Maybe your utility bills won’t go up and your gas prices too. I’m sorry, Chris, I know you wanted to do your part for carbon.

    Your could always send a check to Dr. Chu to use for his massive renewable fuels plan.


  3. Robert says:

    Chris Johnson has made the same statement i hear from so many people, regardless of which side of an issue one stands. The statement is, "most Americans believe". How does anyone know what most Americans believe? It stands as a weakness in one’s arguement. I can’t support my point of view so i’ll make the statement, "most Americans" or "most people" agree with my point of view. Please just tell me what you think and why you think that, i don’t need validation from "most Americans" to make my decision.
    That’s what most Americans believe! 😉

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