Adding $1,960 in 'cap and trade' to the family budget
Created on April 9, 2009
Make lots of room for 'Cap and Tax' in your family budget
If Congress passes the "comprehensive energy bill" as proposed,
it will be a serious shock to American taxpayers.
For starters, the Markey-Waxman measure is packed with more
subsidies and mandates for unsuccessful, unproven energy sources.
It also would raise taxes on reliable energy sources and sock
consumers with a new global-warming tax amounting to $2,000 a year
for a typical household. That's some hit to the family budget.
Rather than stimulate the economy by investing in
clean technology and creating green jobs, as proponents claim, this
government-centric approach would kill jobs and drive up energy
prices for years to come, Heritage analysts Nicolas Loris and
Ben Lieberman conclude in a new paper.
The legislation introduced by Reps. Henry Waxman (D-Calif.) and
Edward Markey (D-Mass.) -- chairmen, respectively, of the House
Energy and Commerce Committee and Energy and Environment
subcommittee -- combines protectionist policies with a wildly
expensive "cap and trade" program to slow global warming. By 2020,
"cap and trade" is supposed to reduce carbon dioxide emissions by
20 percent below 2005 levels -- and, come 2050, by a whopping 83
Markey-Waxman is being promoted as a way to help consumers cope
with higher energy prices. But most alarmingly, Loris and Lieberman
note, the bill would impose $1,960 a year in new costs on the
average household. And that's not even considering a provision,
buried in the bill, allowing "victims" of global warming to sue the
"The reality is that any carbon-capping plan is a costly energy
tax in disguise -- raising energy prices and unemployment with
little, if any, environmental benefit," the Heritage analysts
"Cap and tax" is more like it.
Fossil fuels meet about 85 percent of U.S. energy demand.
Further taxing this lifeblood of the U.S. economy would have
disastrous consequences. A study by Heritage's Center for Data Analysis of last year's global
warming bill concluded it would sap nearly $5 trillion from the nation's economic
output and cost 400,000 to 800,000 jobs a year.
Because targets and timetables in Markey-Waxman are considerably
more stringent, Heritage analysts warn, the economic consequences
of "cap and tax" would be greater still.
As Lieberman and Loris write: "Using taxpayer dollars to invest
in inefficient energy sources while artificially driving up the
costs of reliable energy with a cap-and-trade program will only
cause more economic pain for the consumer -- with no environmental
benefit to show for it."