Obama’s Energy Tax
From AFP Blog
The 2010 Obama budget reveals the major tax hike that Pelosi, Reid, and Obama are counting on to fund the outrageous bailout and stimulus spending that is propelling federal spending to record levels-27.7 percent of GDP in 2009, an all-time record other than the four peak years of World War II.
The tax hike is a broad-based energy tax that will wallop every American who fills a gas tank, pays an electric bill, or buys any product that has to be grown, shipped, or manufactured.
The mechanism is cap-and-trade, which is like a tax on coal, oil, and natural gas but instead of being set at a specific amount, the total level of use is capped and companies are forced to pay the government for emissions permits-which Wall Street wizards at companies like AIG and Goldman Sachs can in turn trade on sophisticated exchanges and derivative markets
White House Budget Director Peter Orzcag admitted that decreasing carbon emissions imposes costs on the economy, and “much of those costs will be passed along to consumers in the form of higher prices for energy and energy-intensive goods.”
Page 21 of the Obama budget proposal highlights his cap-and-trade proposal…
…..While we don’t have numbers yet on the new proposal, the cost of last year’s bill is instructive. A study conducted by SAIC (the same modeling firm the Energy Department uses for its own projections) for the American Council on Capital Formation, found that electricity prices would be expected to increase under anywhere between 101 percent and 129 percent by the year 2030. Prices at the pump would jump 77 percent to 145 percent-bringing not just $4 gasoline, but very possibly $8 gasoline or higher.
The estimated impact on disposable household income due to rising energy prices would then reach anywhere between $4,022 and $6,752. And because an energy tax is regressive, it will fall heaviest on poor and lower middle class folks who spend more of their income on energy…
