View Full Version : 'Cap and Trade' on global warming gases Is Really a Tax

03-25-2009, 08:20 AM
'Cap and Trade' Is Really a Tax

Warren Mass | JBS (http://www.jbs.org/)
25 March 2009

Bloomberg News (http://www.wealth.bloomberg.com/apps/news?pid=20601130&sid=aD1MuN2OZD9Q) reported on March 12 that the budget proposed by President Obama in February anticipated revenues of almost $650 billion by 2019 from a so-called cap-and-trade program. The president's proposal would require companies to buy government-issued permits to release carbon-dioxide into the atmosphere.

The way most cap-and-trade plans are explained is that each company would have a government-imposed limit (cap) on the amount of so-called greenhouse gas that it can emit. Companies that emit less than their allowance can sell (trade) their extra permits to companies that are not as easily able to make the reductions required to stay under their caps.

The term "greenhouse gas" refers to those gases in the earth's atmosphere, such as water vapor, carbon dioxide, etc, that help trap the sun's energy and thus lead to warmer surface temperatures than if there were none of these greenhouse gases present. The global warming alarmists incorrectly maintain (http://www.thenewamerican.com/tech-mainmenu-30/environment/835) that the earth's surface is warming up due to increases in atmospheric carbon dioxide produced by man.

The whole concept of a cap-and-trade tax is based on the myth that mankind is endangered by global warming due to the man-made (anthropogenic) buildup of "greenhouse gases" in the atmosphere. You can verify for yourself that the scientific case for anthropogenic global warming is far from settled by viewing some of presentations by 80 prominent climate experts at the "2009 International Conference on Climate Change (http://www.heartland.org/events/NewYork09/newyork09.html)" held from March 8-10 in New York City.

As for the economic reality of "cap-and-trade," an excellent explanation by Patrick Semmens was posted on the Ron Paul blog on March 9th 2009. It is titled: " 'Cap and Trade' is Really Just a Massive Tax (http://ronpaulblog.com/2009/03/09/cap-and-trade-is-really-just-a-massive-tax/)." As the writer explains: "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."

Why is cap-and-trade a regressive tax? Semmens cites none other than Peter Orszag, Mr. Obama's budget director, who has estimated the price hikes from a 15-percent cut in emissions would cost the average household in the bottom-income quintile about 3.3 percent 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 percent of income. The rich would pay only 1.7 percent.

As Mr. Semmens summarizes the plan:

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.

U.S. Representative Marsha Blackburn (R.-Tenn.) has said that Obama's "cap and trade," which she calls "cap and tax," would cost each household $1300 in new energy taxes. However, the Obama administration's FY2010 budget overview includes a provision for rebating hundreds of billions of dollars (http://wcbstv.com/national/obama.2010.budget.2.949012.html) raised through cap-and-trade programs back to low- and middle-income citizens, amounting to $400 per year for individuals and $800 for couples. The bottom line: Obama's "cap and trade" proposal would amount to a huge new tax on energy. Then, Congress would have the power to choose certain segments of the population to favor with rebates to soften the blow of the cap-and-trade energy tax, but other segments of the population and most businesses would bear the full effect of the new energy tax.

One particularly prominent proposal for legislation mandating cap-and-trade plans was announced in October 2008 by Representatives John Dingell and Rick Boucher in draft form (http://www.instituteforenergyresearch.org/wp-content/uploads/2008/10/dingell-boucher-draft-cap-and-trade-bill.pdf) as the Dingell-Boucher Cap-and-Trade Bill (http://thehill.com/leading-the-news/dingell-boucher-call-for-steep-greenhouse-gas-cuts-2008-10-07.html) with the intent to introduce such a bill in the 111th Congress. Their draft proposal sought to amend the Clean Air Act to mandate a reduction in "greenhouse gas emissions 6 percent below 2005 levels by 2020, 44 percent below 2005 levels by 2030 and 80 percent below 2005 levels by 2050.

A similar cap-and-trade measure, the Lieberman-Warner Climate Security Act of 2007 (http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:s3036pcs.txt.pdf), was introduced in the 110th Congress by Senators Joseph Lieberman and John Warner. The act allowed companies to trade, save, and borrow emission allowances, and to generate credits. This legislative proposal also mandated stringent reductions in gases, by as much as 63 percent below the 2005 level in 2050.

While neither of the above bills has been reintroduced in this Congress as we write, the anticipation of cap-and-trade revenue in the Obama budget should be the handwriting on the wall for all concerned about this new tax-in-disguise.

Click here (http://www.votervoice.net/Core.aspx?AID=972&APP=GAC&SiteID=0&IssueID=16900) to urge your representative to vote no on any cap-and-trade legislation. Cap-and-trade legislation is designed to impose an unnecessary tax geared to solve an unproven problem.


03-25-2009, 08:21 AM
Oppose "Cap and Trade" Legislation for So-called Global Warming Gases

Email Congress!

04-24-2009, 07:49 PM
Rep. John Dingell (D-Michigan):

"Nobody in this country realizes that Cap-and-Trade is a Tax -- and it's a great big one."


04-24-2009, 07:50 PM
No kidding

04-24-2009, 08:12 PM
"Crap on Trade" would be a more precise, descriptive title for the program.

04-24-2009, 10:21 PM
The "enviro" CON JOB is easy to pull off on the masses.

Follow the money.

04-25-2009, 12:05 AM
I think that's the point, taxing economic activity that release greenhouse gases in the atmosphere.

If you're trying to say, it's simply a tax to increase government revenue, well maybe, maybe not. We'll see if government does anything with the tax money to actually further progress in cleaner energy production/technology, or whether the market itself will innovate further because of the added regulation. I'm not at all optimistic about anything government does (unless it shrinks itself)