Originally Posted by annabenedetti
From the WSJ
Who Pays for Cap and Trade?
Cap and trade is the tax that dare not speak its name, and Democrats are hoping in particular that no one notices whowould 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 madates that businesses buy it, the costs would inevitably be passed on to all consumers in the form of higher prices...
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 congreassional 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 $1500, or 2.9% to 2.7% of income. The rich would pay 1.7%....
But the greatest inequities are geographic and would be imposed on the parts of the U.S. that rely most on manufacturing or fossil fuels--particularly coal, which generates most power in the Midwest, Southern and Plains states. It's no coincidence that the liberals most invested in cap and trade--Barbara Boxer, Henry Waxman, Ed Markey--come from California or the Northeast...
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 give 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.
Cap and Trade is nothing more than cleverly disguised corporate welfare, the very thing those on the left side of the political spectrum claim to hate. It will solidify the near monopoly status of the largest corporations while making it impossible for competitors to enter many markets. It will do nothing to reduce overall carbon emissions - the government will simply assert ownership of the atmosphere and auction off the right to pollute a piece of it.
What is completely misunderstood by the majority of Americans is that any time the government interferes in the market, there are unintended consequences. Absent the imposition of price controls, the cost will be entirely born by the consumer. Meanwhile, the profits - let's just call them taxes, for crying out loud - will be used to pay for the wish lists of those who claim income redistribution is social justice. But alas, it will fall far short of the increase in the costs of ALL goods and services which will adversely affect the poor to a much larger degree than others.