Wednesday, April 22, 2009

Obama's proposed $3,600 per-family-energy tax

John McCormack wrote an important story for the Weekly Standard on how liberals, including MSNBC's Keith Olbermann and Rachel Maddow, are desperately trying to discredit a study that says the average American family will pay over $3,000 in annual taxes if Barack Obama's cap and trade tax is enacted.

But, as the saying goes, a lie can make its way halfway around the world while the truth is putting its shoes on. During a lengthy email exchange last week with THE WEEKLY STANDARD, MIT professor John Reilly admitted that his original estimate of cap and trade's cost was inaccurate. The annual cost would be "$800 per household" for a family of four, he wrote. "I made a boneheaded mistake in an excel spread sheet. I have sent a new letter to Republicans correcting my error (and to others)." (His corrected estimate translates to $512 if you use the Republican figure for average household size--2.56 people.)

While $512 is significantly more than Reilly's original estimate of $215, it turns out that Reilly is still low-balling the cost of cap and trade by using some fuzzy logic. In reality, cap and trade could cost the average household more than $3,600 per year.

The $512 paid annually per household is merely the "cost to the economy [that] involves all those actions people have to take to reduce their use of fossil fuels or find ways to use them without releasing [Green House Gases]," Reilly wrote. "So that might involve spending money on insulating your home, or buying a more expensive hybrid vehicle to drive, or electric utilities substituting gas (or wind, nuclear, or solar) instead of coal in power generation, or industry investing in more efficient motors or production processes, etc. with all of these things ending up reflected in the costs of good and services in the economy."

In other words, Reilly estimates that "the amount of tax collected" through companies would equal $3,128 per household--and "Those costs do get passed to consumers and income earners in one way or another"--but those costs have "nothing to do with the real cost" to the economy. Reilly assumes that the $3,128 will be "returned" to each household. Without that assumption, Reilly wrote, "the cost would then be the Republican estimate [$3,128] plus the cost I estimate [$512]."

Cap and trade is nothing but a steep energy tax, and unfortunately, most Americans have never heard of it. That has to change.

During the presidential campaign, Obama said that 95 percent of Americans would receive a tax cut during his presidency. But if you drive a car, use electricity, or heat your home, you will pay Obama's energy tax.

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