Sunday, April 12, 2009

It’s all taxes!

Michele, let’s say that your water and sewer rates go up. What do you think that is?

Tax increase, of course.

What if your private garbage hauler increases his fees?

A tax increase, naturally.

How about if the airline imposes a surcharge for extra fuel costs because Jet A’s price went through the roof?

A tax increase.

What if the cost of milk goes up a dime a gallon?

Tax increase.

Is something stuck in there?

No, everything’s a tax increase.



Well, that explains this:

President Obama has repeatedly said he will not raise taxes on low- and middle-income families, yet his policies do not match his rhetoric. Take for instance, a new tax he has proposed on the use of energy. It's called cap-and-trade or, more appropriately, cap-and-tax. The tax would require energy producers and businesses to pay to emit carbon emissions in the hope of reducing greenhouse gases.

The Democrats need the revenue this will generate to pay for their expensive agenda. But getting it this way would be shortsighted because it will cost far more in the long run than it will bring in. While the president originally estimated that implementing this plan would cost $646 billion over eight years, his deputy director for the National Economic Council, Jason Furman, recently stated that it could cost up to three times that -- bringing the cost closer to $2 trillion.

This is a little dated, but basically this is how a cap and trade system would work:

A cap-and-trade program draws on the power of the marketplace to reduce emissions in a cost-effective and flexible manner. Under the program, an overall national cap on carbon emissions is established. The emissions allowed under the cap are divided up into individual allowances that represent the permission to emit that amount. Because the emissions cap restricts the amount of pollution allowed, allowances that give a company
the ability to pollute take on financial value. Companies are free to buy and sell allowances in order to continue operating in the most profitable manner available to them. Those that are able to reduce pollution at a low cost can sell their extra allowances to companies facing high costs. Each year the number of allowances will decline to match the required annual reduction targets. [from an Obama/Biden campaign document].

Obama’s plan, as originally conceived, would auction off all the permits, with the revenue being dedicated to research to move us toward a low/no carbon energy system. Other proposals would have a mix of give away and auctioned permits, although it is unclear how the beneficiaries of the free permits would be determined.

A threshold question is whether you believe man-man global warming is real. If you don’t, or you think Jesus will take you away to live in the sky before it’s a problem, please stop reading now: you’ve drank, snorted, and mainlined the Kool Aid for too long to be reachable.

If, on the other hand, like virtually all responsible climate scientists and us un-Rapturables do, you think man-made global warming is real, you must address the question: how to we get our carbon emissions down? What is the fairest and easiest to administer way to do it?

We could just blow it off, Spotty.

That’s the conservative approach, grasshopper. It’s like pretending that the unemployed 34-year-old biker dude that your daughter is dating would make a great husband and son-in-law. That’s just denial, and the deniers have all left the room.

We could just impose a limit on everybody, based on historical emissions, square footage of factory, revenue generated, or whatever, and just ratchet that down every year or two. That wouldn’t be a very flexible system, and it would probably favor historic polluters and not allow for any new sources of pollution that might produce more socially useful products or services for each pound of carbon they emitted.

Cap and trade is one way, probably the best way, to allocate the pain. Especially since carbon emission impose costs on the entire society, and this is one way of paying for a way out of this mess. Think of it a collecting the negative externalities of an enterprise, a subject that Spot has addressed, among other places, here, here, and here.

But won’t the costs get shifted forward to consumers, Spot?

Well, yes, grasshopper, but that’s the idea. You see, if an enterprise produces something useful enough that people want it and will pay for it even when the cost of the enterprise’s pollution is included — rather than spread to everybody who has to breathe — well, that seems like a win for the “market mechanism.” Doesn’t it?

Only if you don’t think businesses should be a bunch of freeloaders, Spotty.

Point taken, grasshopper.

But won’t cap and trade cost families over three thousand dollars a year, Spotty?

This is where Michele gets her cap and tax epithet. But it’s a wild, irresponsible claim based on a study, the author of which says that Michele is full of doo doo when she makes that claim. The cost is more like a tenth of that. Here’s Noah Kunin of The Uptake explaining it all:

But what about other countries?

That’s a fair point. But that’s what international diplomacy is for. And the rest of the world is concerned about this, too, even China and India. We’re the laggard. It is juvenile in the extreme, especially as the biggest carbon emitter on the planet, to do nothing because we’re afraid that somebody else won’t do their share.

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