My Uncommon Sense

Cap and Tax: Feeling the heat

Though the Cap and Tax bill (H.R. 2454) has been put on the back burner due to the delay in the socialization of American healthcare, the passage of Henry Waxman’s bill will most likely take place after the month-long August recess.

The cap and tax scheme has so many fallacies and outright lies that it is almost hard for me to address in a civil tone. For starters, it claims to use an economic friendly method to address CO2 emissions. How, I ask? They dish out carbon credits to companies, allowing them to trade or sell off their extra credits to companies who go over on their emissions. Each year, less and less carbon credits are dished out as more companies shift to technologies that use less electricity and use solar, wind, and hydro power. They claim that this creates a new billion dollar market that would spur economic growth. Now, anyone with half a brain and who understands how the economy works knows this is bollocks. This is a tax, and a big one. There will not be enough carbon credits to go around, and thus the companies will be fined. Energy costs rise as households need to become more efficient and new energy taxes are imposed. As the Wall Street Journal explains:

Waxman-Markey would cost the economy $161 billion in 2020, which is $1,870 for a family of four. As the bill’s restrictions kick in, that number rises to $6,800 for a family of four by 2035.

Note also that the CBO analysis is an average for the country as a whole. It doesn’t take into account the fact that certain regions and populations will be more severely hit than others — manufacturing states more than service states; coal producing states more than states that rely on hydro or natural gas. Low-income Americans, who devote more of their disposable income to energy, have more to lose than high-income families.

Not only does the cap and trade system hurt the economy, it hurts American families who are already struggling to make ends meet. Next they go on to say that it will solve the “problem” of global climate change (global warming just didn’t sound- cool enough). I say that even if human emitted CO2 is the main cause of global warming, then they are treating a symptom of the problem and not the problem itself. The real problem would be the use of the fossil fuels. In order to switch to other fuels, those fuels need to become as efficient and as cost-effective as fossil fuels. This can be done by encouraging the economy to invest their money, aka promoting a healthy economy. Any hindrance to the economy would mean that progress is slowed. We have seen during this current recession a lull in investment in alternative fuels. So really, from the environmentalist view, cap and trade is more of a threat to the environment than the fossil fuel industry.

Most of you can figure that I am on the non-anthropological climate change side of the debate, but that debate does nothing. It doesn’t matter whether global warming (or cooling like we have been for 10 years) is man-made or completely natural, the solution is the same. We can all agree that fossil fuels will one day need to be swapped for sustainable fuels, but the way we get there is through a healthy economy. Taxing companies, hurting American’s finances, and imposing outrageous regulations is no way to move into the future.

For those who doubt my analysis, look no further than Britain:

The reality is that cost estimates for climate legislation are as unreliable as the models predicting climate change. What comes out of the computer is a function of what politicians type in. A better indicator might be what other countries are already experiencing. Britain’s Taxpayer Alliance estimates the average family there is paying nearly $1,300 a year in green taxes for carbon-cutting programs in effect only a few years.

Americans should know that those Members who vote for this climate bill are voting for what is likely to be the biggest tax in American history. Even Democrats can’t repeal that reality.