Capitol Hill Blue Forums Political Issues The Obama Administration 6,825.42 Nice job Mr. President

This does not compute.

Your source, please. I can find no proposal from the Obama administration that will raise taxes on the person making 40,000 per year. I really would like to read that text so I can avoid being bamboozled. Please point me to the specifics.

And you are right, that does not compute.

Let's start with Mr. Obama's carbon tax. That cost will be transfered directly to the consumer via higher energy costs.

Not to put too fine a point on it, but Ronald Reagan was not President during the years 1995-98.

Let's start with Mr. Obama's carbon tax. That cost will be transfered directly to the consumer via higher energy costs. Then we have his energy tax proposals.

You can make all the excuses you want, hiding a tax increase behind regulation still equals a tax increase. The two I listed will do the most damage to low income in America. Those price increases will be paid for out of after tax income with no way to recover it on your tax return.

You man of the people are screwing the people he says he wants to protect.

When someone asks for a source, offering a further opinion just doesn't quite fill the bill, Ma. Do you have a source to substantiate your claim or not?

The real fight, therefore, is not whether to impose carbon limits but how to do so and at what cost to business. Obama proposes that companies buy an allowance, or permit, for each ton of carbon emitted, at an estimated cost, to start, of $13 to $20 per ton. (Those permits could also be bought and sold.) Even at the lower range of $13 per ton, energy companies and utilities would likely pass along the added cost to consumers. It's estimated the price of gasoline would go up by 12 cents a gallon and the average electricity bill by about 7% nationally—and far higher in states more dependent on coal. Unfair, say many executives. "It is a clear transfer of the middle part of the country's wealth to the two coasts," says Michael G. Morris, CEO of American Electric Power (AEP), a coal-heavy power generator based in Columbus, Ohio, that supplies electricity in 11 states.

Polluters who can cut their emissions at low cost will be able to do just that, and sell their permits to companies that find it cheaper to buy permits than to clean up their production processes. Not a bad idea -- in theory. But here’s the rub -- or more precisely, rubs.

The first is that this has nothing to do with the stimulus package into which this green agenda has been inserted. It takes years to get permits for new windfarms and transmission lines, by which time we hope the recovery will be well underway.

The second problem is the volatility of the price of permits. The goal is to make it so expensive to emit greenhouse gases that polluters will switch to other, greener means of producing energy. But significant investment in greener technologies can occur only if investors can calculate the costs faced by their CO2 -emitting competitors.

In Europe, the price of permits has fluctuated between zero and around $40 per ton. Green technologies that were economic, and could attract capital when permits fetched $40, are uneconomic when the price at which permits trade is far less, as it now is (about $10).

The third problem is that a recession is a bad time to load costs onto businesses and consumers. The Obama team counters that the levies won’t cut in until 2011. But for businessmen planning long-term investments, that is right around the corner, and the uncertainties associated with cap-and-trade will surely discourage investment.

The fourth problem is that Obama has promised that no family earning less than $250,000 per year will pay one dime in higher taxes. But the companies that have to pay for permits will pass that cost on to consumers in the form of higher prices for electricity and other products. So these families will pay $645 billion, only some of which will be returned in the form of lower income taxes, for a system that is terribly inefficient.

The solution, of course, would be a straight-forward tax on carbon, the proceeds to be refunded through the payroll tax system. But unlike the hidden tax of cap-and-trade, a carbon tax is out there for the voters to see. And given the choice between a stealthy tax and a visible tax, politicians will pick the former every time.

Even if, as in this case, the stealthy tax is a less efficient way to cut emissions, without inhibiting a recovery, than a tax that gives investors in green technologies a firm cost target, and workers a cut in payroll taxes.