|
|
 |
Thursday
March 18, 2010 Since 1922 |
Cap and Trade a hidden tax
From staff reports
Baytown Sun Published July 5, 2009 Last week a reader called and asked about the recent Cap and Trade bill passed by the U.S. House of Representatives and the resulting tax increase to all citizens. The intent of Cap and Trade is to move consumers off carbon base fuels by increasing prices on such to alternative sources.
After some research, we found the reader was correct. The cost of utilities and the cost of gasoline will increase if the U.S. Senate approves the bill.
The Waxman-Markey Bill, or better known as Cap and Trade, is a greenhouse gas emissions control bill that involves the buying and selling of emission permits. Cap and Trade is presented as method to reduce greenhouse gases, which is a positive, but the negative is that cap and trade is also a tax increase on everyone and we believe that the Senate should not pass it.
With this bill, the government sets overall air quality goals for an area and specific sources of air pollution. Power plants, refineries, coal production, etc., are given a certain number of allowances for the amount of various pollutants that the facility is allowed to emit.
Facilities that come in under their specific allowable limits can sell their leftover allowances to other facilities on the open market.
The issues come in with areas of the country that rely most on manufacturing or fossil fuels, particularly coal, that generate most of the power in the Midwest, Southern and Plains states, and oil refineries in South Texas.
So, basically once the caps have been established for the nation, the geographical area that uses coal to generate electricity could be short of credits and have to buy more. Coal provides more than half of all U.S. electricity. When these companies buy more credits on the open market, they charge more for the power. This in turn will increase electric rates for everyone.
An article published in The Wall Street Journal on March 9, 2009 stated the Congressional Budget Office estimates the price hikes from a 15 percent cut in emissions would cost lower income households 3.3 percent of after-tax income every year. Middle income households would see their paychecks cut between 2.9 percent and 2.7 percent per year and upper income households would see a 1.7 percent reduction in their paychecks.
A Cap and Trade system could well create a Wall Street type of emission brokers—the same as today’s Wall Street for stocks--and it would create a larger bureaucracy that increases the cost.
The other increase to the average consumer will be from gasoline taxes. Based on information from the American Petroleum Institute (API), the price of gasoline could increase by 14 cents per gallon in 2012 and another 23 cents in 2019.
The other option that is available is a straight carbon tax. This tax would be much more transparent, have less bureaucracy and be more equitable. Also, a carbon tax offers possibilities that other nations would accept such a tax. The U.S. can reduce its emissions, but if the world as a whole does not reduce emissions, then global warming will continue.
Unfortunately, the average citizen takes very little interest in Congress until it hits them directly and by that time it’s too late. It is not too late now to contact your senator and let him/her know that he/she should vote against this bill in it current form. If you do not contact your representative, they will vote the way they think you want them to, or most likely, along party lines, as did the House of Representatives.
Baytown Sun Published July 5, 2009 Last week a reader called and asked about the recent Cap and Trade bill passed by the U.S. House of Representatives and the resulting tax increase to all citizens. The intent of Cap and Trade is to move consumers off carbon base fuels by increasing prices on such to alternative sources.
After some research, we found the reader was correct. The cost of utilities and the cost of gasoline will increase if the U.S. Senate approves the bill.
The Waxman-Markey Bill, or better known as Cap and Trade, is a greenhouse gas emissions control bill that involves the buying and selling of emission permits. Cap and Trade is presented as method to reduce greenhouse gases, which is a positive, but the negative is that cap and trade is also a tax increase on everyone and we believe that the Senate should not pass it.
With this bill, the government sets overall air quality goals for an area and specific sources of air pollution. Power plants, refineries, coal production, etc., are given a certain number of allowances for the amount of various pollutants that the facility is allowed to emit.
Facilities that come in under their specific allowable limits can sell their leftover allowances to other facilities on the open market.
The issues come in with areas of the country that rely most on manufacturing or fossil fuels, particularly coal, that generate most of the power in the Midwest, Southern and Plains states, and oil refineries in South Texas.
So, basically once the caps have been established for the nation, the geographical area that uses coal to generate electricity could be short of credits and have to buy more. Coal provides more than half of all U.S. electricity. When these companies buy more credits on the open market, they charge more for the power. This in turn will increase electric rates for everyone.
An article published in The Wall Street Journal on March 9, 2009 stated the Congressional Budget Office estimates the price hikes from a 15 percent cut in emissions would cost lower income households 3.3 percent of after-tax income every year. Middle income households would see their paychecks cut between 2.9 percent and 2.7 percent per year and upper income households would see a 1.7 percent reduction in their paychecks.
A Cap and Trade system could well create a Wall Street type of emission brokers—the same as today’s Wall Street for stocks--and it would create a larger bureaucracy that increases the cost.
The other increase to the average consumer will be from gasoline taxes. Based on information from the American Petroleum Institute (API), the price of gasoline could increase by 14 cents per gallon in 2012 and another 23 cents in 2019.
The other option that is available is a straight carbon tax. This tax would be much more transparent, have less bureaucracy and be more equitable. Also, a carbon tax offers possibilities that other nations would accept such a tax. The U.S. can reduce its emissions, but if the world as a whole does not reduce emissions, then global warming will continue.
Unfortunately, the average citizen takes very little interest in Congress until it hits them directly and by that time it’s too late. It is not too late now to contact your senator and let him/her know that he/she should vote against this bill in it current form. If you do not contact your representative, they will vote the way they think you want them to, or most likely, along party lines, as did the House of Representatives.