The Democrats' light switch tax

John Culberson:

President Barack Obama and liberals in Congress support federal regulation of carbon dioxide. Proponents of CO2 regulation claim that taxing polluters is an effective way to reduce carbon emissions, but the staggering costs of a cap-and-trade program will stifle our domestic energy and manufacturing sectors and result in major rate increases for consumers. The cap-and-trade plan should really be called “the light switch tax,” because if this bill becomes law, you will pay a tax every time you flip your light switch.

U.S. Reps. Henry Waxman, D-Calif., and Edward Markey, D-Mass., recently introduced the American Clean Energy and Security (ACES) Act of 2009, which would create a cap-and-trade program requiring CO2 emissions to be reduced 17 percent below 2005 levels by 2020 and 83 percent below 2005 levels by 2050. The bill would set up a cap-and-trade system that sets a limit (or cap) on total CO2 emissions from fossil fuels and establishes a yet-to-be-defined carbon allowance on each utility or company. Details such as cap levels and which companies are subject to allowances are still being finalized by Democrats, but the outcome looks grim for consumers.

Since fossil fuels supply 85 percent of U.S. energy demand, taxing one of the most vital and productive sectors of our economy will only prolong and deepen the current recession. The Heritage Foundation’s Center for Data Analysis’ study of the Lieberman–Warner cap-and-trade bill (a bill rejected by the Senate last year) found that the legislation would result in total GDP losses of nearly $5 trillion and job losses of 400,000 to 800,000 per year. The ACES Act is more restrictive and would cause even greater economic damage. The cost to Texas ratepayers alone could reach $20 billion in added electricity costs, which is an increase of more than $600 per year in utility bills, according to a study commissioned by the Electric Reliability Council of Texas.

The nonpartisan Congressional Budget Office (CBO) reports that under a cap-and-trade program, companies would ultimately pass these costs along to their customers in the form of higher rates. CBO notes, “Regardless of how the allowances were distributed, most of the cost of meeting a cap on CO2 emissions would be borne by consumers who would face persistently higher prices for products such as electricity and gasoline.”

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The simple fact is that corporations don't pay taxes they collect them from their customers. Democrats like these kind of taxes because they hope to avoid responsibility for the anger of the the tax payers. This is an attempt by Democrats to lower our standard of living to make a futile attempt to deal with their own carbon phobia. This is not something votes want and Democrats should pay a political price for trying to impose it on them.

The Detroit News also explains the problems with the bill.