THE ROCK PULPIT
If you are afraid of heights, take a valium before getting past #21 of these 40 slides. What a planet.
CAP AND TRADE
Craig Daniger: “From John Maudlin’s letter:
President Obama give us a budget with a projected deficit of $1.75 trillion dollars, and a massive tax increase on the “wealthy.” But hidden in the details was an even larger tax increase on everyone. Obama wants to create a cap-and-trade program for carbon emissions. This is expected to generate $79 billion in 2012, $237 billion by 2014, and grow to $646 billion by 2019. These will be payments by energy (primarily utility) companies to the government. That will cause utilities to have to raise the prices they charge customers for energy. Such a level of taxation is eventually 4-5% of total US GDP. That is not small potatoes. And since the wealthy do not use all that much more power than the rest of us, it will affect the lower incomes disproportionately.
“It will take money out of consumers’ pockets and transfer it to the government. You can call it cap-and-trade, but it is a tax. And a huge one. And by driving the cost of energy up, it will drive high-energy-using businesses away from the US to developing countries where energy is cheaper. It will make it even harder for people to save money and drive up costs for the elderly and retired. But it will make the environmental lobby happy.”
☞ Ah, but consider the beauty of this. First of all, it is a tax you can chose not to pay. All you have to do is strive, over the next 10 years, to use a lot less energy. More efficient lighting, more efficient appliances, more efficient insulation, more efficient cars; better habits (do you really need the lights on when you’re not in the room? Is there no way to idle the computer a few hours a day?).
Granted, for the super-green citizen who’s already done much of this, there will be relatively less inefficiency to be wrung out of his or her budget. But something tells me, he or she would welcome this kind of incentive: taxing the thing we want to discourage (fossil fuel energy consumption); thereby to keep the income tax as low as possible on the things we want to encourage (work and investment).
And businesses get the same incentives: wring out inefficiencies, design with energy cost more prominently in mind, switch to non-carbon-based energy.
These are good incentives that we should have built into our economy decades ago. Had we done so, Detroit would most likely lead the world in fuel efficiency – and sales. Our balance of trade deficit would not have run wild. The dollar would be stronger. Our National Debt would be lower. Our air would be cleaner. Our trajectory to address the global climate change emergency would have been longer.
Better late than never.
NOTE: I know a lot of people think a direct “carbon tax” is superior to the cap-and-trade system. I don’t understand it well enough to be certain they’re right. If they are, though, my guess is that the Administration knows it, but thinks a direct tax would simply be too unpopular to pass Congress. This is America, after all.
Quote of the Day
Capital is the fruit of labor, and could never have existed if labor had not first existed. Capital has its rights, which are as worthy of protection as any other rights.~Abraham Lincoln
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