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Cap & Trade Could Cost Families an Extra $1,761 in New Taxes
USAgNet - 09/17/2009

A report from CBS News reveals the Obama administration's private analysis that a cap and trade system will raise energy prices and cost households an extra $1,761 a year in new taxes. Using the Freedom of Information Act, the Competitive Enterprise Institute obtained this previously unreleased analysis from the Treasury Department.

"I have said before and I will say again, the cap and trade bill is the single, largest, economic threat to farmers and rural Americans in decades. This report just emphasizes my point, and it highlights how dishonest the Obama administration is being to the American people. President Obama knows the cap-and-trade bill will destroy our way of life with higher energy costs, higher food costs and higher taxes and yet he continues to tell the American people that it will bring us economic prosperity," said Ranking House Ag Committee Member Frank Lucas.

The article states that the Obama administration has privately concluded that a cap and trade law would cost American taxpayers up to $200 billion a year, the equivalent of hiking personal income taxes by about 15 percent.

A previously unreleased analysis prepared by the U.S. Department of Treasury says the total in new taxes would be between $100 billion to $200 billion a year. At the upper end of the administration's estimate, the cost per American household would be an extra $1,761 a year.

A second memorandum, which was prepared for Obama's transition team after the November election, says this about climate change policies: "Economic costs will likely be on the order of 1 percent of GDP, making them equal in scale to all existing environmental regulation."

One reason the bill faces an uncertain future is concern about its cost. House Republican Leader John Boehner has estimated the additional tax bill would be at $366 billion a year, or $3,100 a year per family. Democrats have pointed to estimates from MIT's John Reilly, who put the cost at $800 a year per family, and noted that tax credits to low income households could offset part of the bite. The Heritage Foundation says that, by 2035, "the typical family of four will see its direct energy costs rise by over $1,500 per year."

The FOIA'd document written by Judson Jaffe, who joined the Treasury Department's Office of Environment and Energy in January 2009, says: "Given the administration's proposal to auction all emission allowances, a cap-and-trade program could generate federal receipts on the order of $100 to $200 billion annually." (Obviously, any final cap-and-trade system may be different from what Obama had proposed, and could yield higher or lower taxes.)

Because personal income tax revenues bring in around $1.37 trillion a year, a $200 billion additional tax would be the equivalent of a 15 percent increase a year. A $100 billion additional tax would represent a 7 or 8 percent increase a year.

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