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Bearden: “Cap-and-Trade Means Tax-and-Spend” | Missouri Political News Service

Bearden: “Cap-and-Trade Means Tax-and-Spend”

June 24th, 2008 by mopns · No Comments

By Carl Bearden and Phil Kerpen

The U.S. Senate finished its week long debate on a massive new regulatory scheme known as “cap-and-trade, a phrase the Washington Post described as a “pithy marketing gimmick. On Friday, June 6, the Senate failed by a margin of 48 – 36 to get the 60 votes needed for cloture. However, the fight is not over. Senator Barbara Boxer and company have vowed to bring the bill up again next year before Congress and a newly elected executive branch they feel would be sympathetic to their cause.

Even though their attempts failed this year, cap-and-trade is still being considered their “weaponof-choice” against climate change. However, we know that cap-and-trade is a dangerous policy that will have detrimental effects to our economy. What cap-and-trade really means is tax-andspend—at an unprecedented level and with sweeping consequences throughout the economy, both nationally and here in Missouri. It’s the worst kind of tax hike—a hidden tax hike, hidden behind a complex regulatory scheme that only adds to the cost. This past attempt to install a capand- trade regime by Sens. Joseph Lieberman and John Warner and known as Lieberman-Warner, would have increased federal revenue by $1.2 trillion over just the first 7 years that it was in
effect, according to the nonpartisan Congressional Budget Office (CBO).

Cap-and-trade imposes a limit on carbon dioxide and other greenhouse gas emissions across the entire economy, with permits required for the legal right to emit those gases. The cost of these permits is a hidden tax, whose cost is passed on almost entirely to consumers according to the CBO.

An analysis conducted by the highly-respected forecasting firm SAIC and commissioned by the American Council on Capital Formation projected the economic impact of Lieberman-Warner for Missouri. They found that by 2020, with the bill in effect just 8 years, we would have: 23,000 to 34,000 fewer jobs, $900 to $2,800 in lower annual disposable income per household, an annual hit to Missouri economy of between $2.7 billion and $3.7 billion, and much higher energy prices — 21 percent to 67 percent higher for gasoline and 31 percent to 39 percent higher for electricity. The study also found that lower-income families — people who are least able to absorb higher energy costs — will be the hardest hit.

These astonishing economic costs are not an unfortunate side effect of the bill—they are its
intended purpose. Cap-and-trade is a sneaky way of levying a huge energy tax hike that will make energy more expensive so people use less of it. Yet cap-and-trade is already failing to reduce emissions in Europe and even if emissions targets are met it would have no discernible effect on global average temperature.

Feel good symbolism is not worth trillions of dollars in higher energy taxes, and neither is taking the first step on a path toward shutting down modern civilization. We must instead address climate change in ways that do not impose onerous taxes on energy. One common-sense idea would be to expand alternative-energy generating capacity, including nuclear power, by lowering regulatory barriers. Another would be to promote international trade in clean energy technology. One idea that can be done at the local level is to invest in traffic-light coordination, so that drivers don’t get stuck at corner after corner idling unnecessarily. We also need to explore ways to adapt to a slightly warmer world (if the models predicting warming are right) since the carbon dioxide is already in the atmosphere and it’s unlikely that India and China are going to reduce
their emissions.

The wealth and innovation delivered by a free market is our most effective means of addressing any climate threat, and that’s why undermining our prosperity with cap-and-trade would be a huge mistake. Sen. Kit Bond has been a great advocate for Missouri taxpayers and has taken a strong stance against cap-and-trade legislation. Sen. Claire McCaskill supported the vote to end debate but has stated that she is against the bill as it was proposed. Let Sen. Bond and Sen. McCaskill know that Missourians are not going to accept the agenda of radical alarmists at the expense of Missouri’s economic prosperity.

Carl Bearden is Missouri state director and Phil Kerpen is national director of policy for
Americans for Prosperity.



Tags: Carl Bearden · MO Economy

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