Conservatives Falsely Assert That Green Economy Legislation Would Impose $3,100 Tax On Families
Conservatives Falsely Assert That Green Economy Legislation Would Impose $3,100 Tax On Families
Conservatives in Congress are resting their objections to effective green economy legislation on a bogus stat. Conservative leaders like Rep. John Boehner (R-OH) and Sen. Mitch McConnell (R-KY) are attacking the cap-and-trade proposal before Congress by claiming that it would “cost every American family up to $3,100 per year in higher energy prices.”
This is a deliberate lie.
They seem to be getting this number from an intentional misinterpretation of a 2007 study performed by a group of researchers at the MIT.
In an interview with PolitiFact, John Reilly, an MIT professor and one of the authors of the study, explained about this $3,100 claim:
“It’s just wrong. It’s wrong in so many ways it’s hard to begin.”” [...]
“Someone from the House Republicans had called me (March 20) and asked about this,” Reilly said. “I had explained why the estimate they had was probably incorrect and what they should do to correct it, but I think this wrong number was already floating around by that time.”
House Republicans apparently took the total revenues from the hypothetical cap and trade system that MIT analyzed and crudely divided it by the number of households in America, getting approximately $3,100 per family.
What they don’t mention, however, is that not only did John Reilly explicitly tell them that this was an inappropriate way to do this calculation, but that MIT had determined the net welfare effect on a typical family and the burden would be less than 1/40th what they claim, and wouldn’t occur until 2015.
As PolitiFact explains: “The report did include an estimate of the net cost to individuals, called the “welfare” cost. It would be $30.89 per person in 2015, or $79 per family if you use the same average household size the Republicans used of 2.56 people.” In exchange, we’d get a clean & renewable energy economy, decreased reliance on oil, and a safer climate for the world.
The reason Boehner’s methodology is totally inappropriate?
“That’s just not how economists calculate the cost of a tax proposal, Reilly said. The tax might push the price of carbon-based fuels up a bit, but other results of a cap-and-trade program, such as increased conservation and more competition from other fuel sources, would put downward pressure on prices. Moreover, consumers would get some of the tax back from the government in some form. [In this case,President Obama wants to use revenues from cap-and-trade to fund a tax cut for 95% of working families]“
When conservatives tell you you’d see your energy bills go up $3,100 every year, it’s not distortion or spin, it’s just a lie.
Cross-posted at ThinkProgress.
6 Responses to “Conservatives Falsely Assert That Green Economy Legislation Would Impose $3,100 Tax On Families”
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The truth is science changes mind it’s mind about the facts to much !!!!!
April 3rd, 2009 at 12:54 amWe shouldn’t base our economy and future on facts we aren’t so sure about.
My fear …..Is my generation will go down in history looking foolish ignorant of our own history!!!! Get out and get the facts people!!!!
Eric, the irony in your post is simply stunning.
April 5th, 2009 at 10:22 amWellington once said critically of one of his generals, “He gets involved in battles he can not win.”
It is personally aggravating to find myself acknowledging serious good sense in Boehner’s position. Yes, he definitely oversimplifies. Saying it will cost $3100 per year in added electric bills per household might not be correct; we can indeed defer the added cost to future generations, either in bond issues as we do in California, or by piling on more national debt or in printing money at the federal level.
Some might argue that the business world will absorb the cost of higher priced coal. Surely, we know by now that all costs ultimately descend on the consumer. As discussed above, they will be paid now or later.
Of course tax cuts could help. Huh? Certainly redistribution of wealth by tax cuts could help some people; but when applied to the middle class, it can not be meaningfully done. If tax cuts provide people with enough disposable cash, they will simply be able to afford continued use of energy, unabated. The net effect on CO2: Zero.
Well, there is one other escape path for the consumer. That is to conserve. Insulation is a meaningful answer for new construction but for existing buildings this is quite limited in applicability since much that could be imagined turns out to be quite cost prohibitive. Thus, insulation offers slow remediation. Squigly light bulbs will help too, but not to the degree needed.
So the only thing left seems to be more use of non-coal sources. Now comes the nasty question of affordability. Again it has to be seriously thought through so a further load does not come down on the consumer. No, don’t think rebates, tax credits, or whatever; these all deplete the public trough which has to be refilled, sooner or later.
Where is a battle we can win? We better get looking because this carbon (CO2 gdit) tax thing is not looking like a path to climate progress.
April 5th, 2009 at 3:44 pmI guess if we are talking about coal it is reasonably correct chemistry to speak of “carbon.”
Why not just say “coal?”
April 5th, 2009 at 4:24 pmOne thing for sure – each household will pay much more for energy. Out of their pockets. $3100 per year extra. The benefits returned by imposing the tax, which supposedly drop the cost to $79, will show up where, exactly? Certainly not in my bank account. Perhaps somewhere else that I might agree is beneficial to me, but I would like to know where, and I would like to know who is going to bestow this upon me.
April 7th, 2009 at 12:45 pmTom11: Actually, no. Cap and trade is not a tax, what happens to energy costs is completely different from the value of the carbon market created. The “benefits created” aren’t what “drop the cost.” Putting a price on pollution only means that costs rise if people pollute as much. Pollution is waste — reducing waste saves money and strengthens the economy, from the household to the national level.
President Obama has called for revenues from a cap and trade market to be directed into a middle class tax cut. The money comes from pollution and goes into rewarding work.
Maybe those aren’t your values but they are mine.
April 7th, 2009 at 1:25 pm