Down economy? Tax revenues in the toilet? Don’t worry Bunky, government will always find a way to keep it’s revenue stream full:
The days of buying online to avoid paying sales taxes may soon be over.
A bill is expected to be introduced to Congress this week that would force retailers like eBay and Amazon.com to start collecting sales taxes on behalf of states from people who shop online or through mail order.
Of course if you know anything about government you also know this was inevitable. However, it is lines like the following which make my blood boil:
“This would be fiscal relief for the states that wouldn’t require any money from the federal government,” said Neal Osten, a senior policy analyst with the National Conference of State Legislatures, which is drafting the bill.
Osten pointed to a recent study that said state sales tax collections fell to their lowest levels in 50 years at the end of 2008.
My earnings are not there to be “fiscal relief” for profligate states who find themselves with budget shortfalls due to poor budgetary practices. Osten seems to think this is some sort of money tree he’s discovered. More importantly, he seems to view the money as rightfully the government’s, not that of the wage earner. And notice, it is a lobbying group with a vested interest in the outcome writing the legislation. What happened to that promise about “no lobbyists” the new administration made? Special interest democracy is alive and well.
Of course a recession is a great time to pass tax legislation like this – why not cool another segment of the economy by giving priority to government tax collections over spurring economic growth?
The more I observe these lunatics and consider their blinkered and ignorant view of the economic world, the less confidence I have that they’ll figure out that the way out of a recession is to cut taxes, not pass new ones.
Kimberley Strassel has a good article in today’s WSJ about what she sees as Democrats overreaching on climate legislation.
For one, they seem to be misreading the public’s support for the radical type legislation that Nancy Pelosi and Henry Waxman favor. Since the recession has hit, people are much less concerned about the environmental impact of certain industries and much more concerned about preserving the jobs they provide.
But it is more than that – the Democratic leadership seems to be misreading the political tea-leaves as well:
To listen to Congressman Jim Matheson is something else. During opening statements, the Utah Democrat detailed 14 big problems he had with the bill, and told me later that if he hadn’t been limited to five minutes, “I might have had more.” Mr. Matheson is one of about 10 moderate committee Democrats who are less than thrilled with the Waxman climate extravaganza, and who may yet stymie one of Barack Obama’s signature issues. If so, the president can thank Democratic liberals, who are engaging in one of their first big cases of overreach.
Not that you couldn’t see this coming even last year, when Speaker Nancy Pelosi engineered her coup against former Energy chairman John Dingell. House greens had been boiling over the Michigan veteran’s cautious approach to climate-legislation. Mr. Dingell’s mistake was understanding that when it comes to energy legislation, the divides aren’t among parties, but among regions. Design a bill that socks it to all those manufacturing, oil-producing, coal-producing, coal-using states, and say goodbye to the very Democrats necessary to pass that bill.
Of course, that’s precisely what the Waxman’s of the party intend to do. As Strassel notes, Pelosi engineered the replacement of Dingell with Waxman precisely to push the more radical agenda.
And 2010 looms:
There’s Mr. Matheson, chair of the Blue Dog energy task force, who has made a political career championing energy diversity and his state’s fossil fuels, and who understands Utah is mostly reliant on coal for its electricity needs. He says he sees several ways this bill could result in a huge “income transfer” from his state to those less fossil-fuel dependent. Indiana Democrat Baron Hill has a similar problem; not only does his district rely on coal, it is home to coal miners. Rick Boucher, who represents the coal-fields of South Virginia, knows the feeling.
Or consider Texas’s Gene Green and Charles Gonzalez, or Louisiana’s Charlie Melancon, oil-patch Dems all, whose home-district refineries would be taxed from every which way by the bill. Mr. Dingell remains protective of his district’s struggling auto workers, which would be further incapacitated by the bill. Pennsylvania’s Mike Doyle won’t easily throw his home-state steel industry over a cliff.
Add in the fact that a number of these Democrats hail from districts that could just as easily be in Republicans’ hands. They aren’t eager to explain to their blue-collar constituents the costs of indulging Mrs. Pelosi’s San Francisco environmentalists. Remember 1993, when President Bill Clinton proposed an energy tax on BTUs? The House swallowed hard and passed the legislation, only to have Senate Democrats kill it; a year later, Newt Gingrich was in charge. With Senate Democrats already backing away from the Obama cap-and-trade plans, at least a few House Dems are reluctant to walk the plank.
Never mind that passage of this bill would most likely retard economic recovery for the foreseeable future, it might also begin to flip the House politically when its consequences are made clear to the public. Waxman and his allies are attempting to poltically arm-twist and bribe enough Democrats to push this through the House, but it apparently faces tough sledding in the Senate, even with a filibuster-proof majority in the offing.
How this ends up is anyone’s guess, but as strange as it sounds, the recession is our best friend in this case. Cap and trade would be disasterous now – not that it wouldn’t be even in a strong economy. And there seems to be building support on both sides to stop it. What you have to hope is that somehow it will then be delayed enough that the mix in Congress changes to the point that the Dem’s radical environmental policy ends up being DOA.
I put economics is [“”] for a reason. And that has to do with the fact that there was little about the first 100 days which had much to do with economics and certainly wasn’t economical. Feast your eyes on this. Yes, it’s from the GOP, but “numbers is numbers”, folks, and check out the quote attached to the chart:
Heritage also weighs in with a few trenchant observations:
In his first 100 days, President Obama will have quadrupled the budget deficit he inherited while pledging to cut it in half, which would still leave a deficit double the size it was in January 2009.
Make sure you get that – quadrupled the budget deficit within 100 days. Promised to cut budget deficit in half. Even if he does that, it will still be twice the size of the budget deficit in Jan 2009 when he made the promise. Yup, smoke and mirrors.
The President came into office promising a “net spending cut” then signed the stimulus bill, which will dump $9,400 in new debt on the average American household. Under CBO’s estimate, if some programs become permanent, this would skyrocket to $26,600 per American household.
And we are reminded that there is nothing more permanent than a temporary government program (REA anyone?).
Just to give this all a little more perspective:
In his first 100 days, President Obama proposed a budget that would dump a staggering $9.3 trillion in new debt—$68,000 per household—into the laps of American children. This is more debt than has been accumulated by all previous Presidents in American history combined.
And yeah, for the lefties that includes the “selected but not elected” George W. Bush among all the president’s combined. Or said another way, 44 is spending more than the previous 42 combined (and no I didn’t screw up, Grover Cleveland was president twice at two different times).
So while you see the informationally deprived “celebrating” the “accomplishments” of his first 100 days, don’t forget that those yet to be born aren’t going to be quite as enamored with Obama as the present spendthrifts who think he’s doing such a great job economically.
GOP Know-Nothings Fought Pandemic Preparedness
posted by John Nichols on 04/27/2009 @ 08:00am
When House Appropriations Committee chairman David Obey, the Wisconsin Democrat who has long championed investment in pandemic preparation, included roughly $900 million for that purpose in this year’s emergency stimulus bill, he was ridiculed by conservative operatives and congressional Republicans.
Obey and other advocates for the spending argued, correctly, that a pandemic hitting in the midst of an economic downturn could turn a recession into something far worse — with workers ordered to remain in their homes, workplaces shuttered to avoid the spread of disease, transportation systems grinding to a halt and demand for emergency services and public health interventions skyrocketing. Indeed, they suggested, pandemic preparation was essential to any responsible plan for renewing the U.S. economy.
But former White House political czar Karl Rove and key congressional Republicans — led by Maine Senator Susan Collins — aggressively attacked the notion that there was a connection between pandemic preparation and economic recovery.
Now, as the World Health Organization says a deadly swine flu outbreak that apparently began in Mexico but has spread to the United States has the potential to develop into a pandemic, Obey’s attempt to secure the money seems eerily prescient.
And his partisan attacks on his efforts seem not just creepy, but dangerous.
According to this theory, if not for GOP opposition to one particular line item in the stimulus bill, everything would be perfectly hunky-dory right now. The leftosphere, having received their marching orders, responded dutifully:
Christy Hardin Smith: “Pandemic preparedness? Another GOP casualty. Dude, where’s my planning?”
Washington Monthly: GREAT MOMENTS IN POLITICAL INSIGHT (“On Feb. 5, the same as Collins unfortunate remarks, Karl Rove had an op-ed in the Wall Street Journal complaining about stimulus package, in part because it included money for ‘pandemic flu preparations.’
Sometimes, these folks just don’t think ahead.”)
It’s hard to know where to begin with this sort of nonsense. Competing for most ridiculous premise is the idea that a couple of remarks from Susan Collins and Karl Rove (who does not vote in Congress) were able to back off the entire Democratic Party. You know, the ones who control the House and Senate? I mean, how spineless do you have to be if you control the House, the Senate, and the White House, but you can’t stand up to one little old lady from Maine and a former politico? Pretty wimpy I’d say.
We’re also apparently expected to believe that pandemic flu was a big issue during the days of stimulus debate, instead of the impending financial collapse unless Congress did something (anything!). My recollection of those heady days in January and February conjures up much back-and-forth about whether the bill would save jobs, but nothing about whether we should do more to prevent a flu pandemic. Come to think of it, isn’t that why it was called the “stimulus bill” in the first place, as in to stimulate the economy? And wasn’t there a bunch of hullabaloo about so much pork being in the bill? Yes, I’m sure I read about that somewhere. Indeed, even Chuck Schumer was calling appropriations for pandemic preparations “porky”:
He [Chuck Schumer] said the compromise hammered out between Senate Democrats and moderate Republicans – which has enough support to get it past any threat of a filibuster – was far better than that passed by the House on Jan. 29.
“All those little porky things that the House put in, the money for the [National] Mall or the sexually transmitted diseases or the flu pandemic, they’re all out,” Schumer said.
Clearly, beefing up the federal government’s response to a flu outbreak was not the priority during the stimulus debate.
The “GOP did it” analysis also seems to suffer from that problem of time beginning on the day Obama was elected. It’s further complicated by the fact that, even if Obey’s appropriation had been included in the stimulus bill, it wouldn’t have the government in any better of a position than it is now (a fact which the legislators seem to understand since they had exempted Obey’s provision from the requirements that the money appropriated be used within 30 to 90 days (i.e. section 1103)). Regardless, the idea that the money appropriated less than two months ago would save our bacon today is unrealistic at best.
But doesn’t that just beg the question: what preparations have been made for a flu pandemic? Seeing as it’s so frightfully important that we are ready and eager to blame an entire political party for potential ill health, why is it that we’re only hearing about it now? What took Congress so long? Well, nothing actually:
What’s scarier in Washington, the prospect of a flu virus that could kill millions or the possibility that voters will toss out any politician who fails to prepare the nation for such a disaster? A pandemic could be a true global catastrophe, of course. But along the Potomac the second threat is also very real. That’s a big reason why both the White House and Congress are rushing to boost America’s capacity to produce vaccines and drugs against flu and other diseases.
On Oct. 18 the Senate Health, Education, Labor & Pensions Committee hurriedly passed a bill that would offer vaccine makers new liability protections and incentives for research. And the Administration is about to issue a flu pandemic plan expected to be extremely aggressive. “There is a sense of urgency on both sides of Pennsylvania Avenue,” says Senate Budget Committee Chairman Judd Gregg (R-N.H.).
That would be an article from October 2005 when the “White House” referred to President Bush, and “Congress” referred to the Republican controlled body. Seems like the Republicans were worried about a flu outbreak after all. How worried? Enough to spend gobs of money on it which, although comparatively paltry in these post-bailout days, completely dwarfs the proposal from Rep. Obey:
In 2004, Congress approved Project BioShield, a plan that would spend $5.6 billion over 10 years to jump-start production of vaccines and drugs to counter bioterror threats.
Again, that would be a GOP-controlled Congress. Of course, the GOP hasn’t always been in control. Many will recall that the Democrats swept into power in 2006. This was heralded as the harbinger of great change, and the first wave of the Democratic majority. What fun! Seeing as how important legislating against a flu pandemic is to the Democrats, surely they did something to improve upon the meager sum approved under the reign of the hated Republicans:
The fiscal 2008 Consolidated Appropriations Act working its way through Congress this week allocates only $76 million for pandemic influenza preparedness funding for the Health and Human Services Department, though the Bush administration requested a budget of $870 million for it.
The bill also chopped in half requested funding for the HHS office managing efforts to develop a national electronic health record system.
While House and Senate appropriations committees said they continue to support HHS pandemic flu preparation efforts, they indicated in the bill that they decided to cut the 2008 pandemic preparation budget because approximately $1.2 billion remains available from funds provided in previous appropriations.
Oops … I wonder how much of that $76 million is still left? It kinda makes you think that preventing and/or preparing for a flu pandemic wasn’t really such a big priority for the Dems, now doesn’t it? Yet somehow, in the heat of the debate over whether it was a good idea to mortgage the future of a few generations of Americans, it’s Susan Collins’ and the GOP’s fault that a swine flu outbreak has occurred, and the federal government may not be prepared for it. Yeah, that makes sense.
Well, I guess we should just chalk it all up to another crisis that Rahm doesn’t want to go to waste. Nothing like the good ole game of playing politics with people’s fears of becoming deathly ill. Not that any of the leftosphere would ever approve of such tactics, seeing as how moral and sanctimonious they seem to get. [/eyeroll]
MORE: I wonder which would be more effective in dealing with the swine flu outbreak — appropriating hundreds of millions more dollars on pandemic preparations, or staffing the HHS that would be in charge of actually spending the money? I know how John Nichols and the Nation (and, therefore, the leftosphere) would answer. For them, this must just be an inconvenient distraction:
The Obama administration declared a “public health emergency” Sunday to confront the swine flu — but is heading into its first medical outbreak without a secretary of Health and Human Services or appointees in any of the department’s 19 key posts.
President Barack Obama has not yet chosen a surgeon general or the head of the Centers for Disease Control and Prevention. His choice to run the Food and Drug Administration awaits confirmation.
Smoothest transition EVAH!
EVEN MORE: I’m guessing that the fact-checkers at the Nation have been sacked:
(1) It’s a good point to make that Collins somehow thought pandemic preparation money was not an economic issue deserving of inclusion in the stimulus package. But Collins was for the money being included in some other form. Now, I think her reasoning is stupid — pandemic prevention is part of a recovery plan. But it’s not like she was against the very idea of it.
In fact she has voted for a number of bills that included pandemic prevention in the past, including the war funding bill of 2007. This undermines her point about which basket the funding is in, but also proves that she’s not against the idea of it.
(2) Relatedly, this money is actually the tail end of money ($7.1 billion worth) that President George W. Bush pushed for in 2005. So this is actually Bush money! To pin all this on the GOP is, thus, a little silly.
(4) Importantly, the vast majority of the pandemic prevention money was passed in March’s omnibus bill, which passed the Senate by (uncounted) voice vote.
And that’s from a Kosmonaut [via: MM].
My latest Examiner.com article. It’s always nice when government decides it can ignore the laws it doesn’t like, isn’t it?
This story typifies, at least to me, the problem we can expect in the health care field if government becomes even more involved than it is now:
Obama administration officials, alarmed at doctor shortages, are looking for ways to increase the supply of physicians to meet the needs of an aging population and millions of uninsured people who would gain coverage under legislation championed by the president.
The officials said they were particularly concerned about shortages of primary care providers who are the main source of health care for most Americans.
One proposal — to increase Medicare payments to general practitioners, at the expense of high-paid specialists — has touched off a lobbying fight.
Family doctors and internists are pressing Congress for an increase in their Medicare payments. But medical specialists are lobbying against any change that would cut their reimbursements. Congress, the specialists say, should find additional money to pay for primary care and should not redistribute dollars among doctors — a difficult argument at a time of huge budget deficits.
The trend for years has been away from general practice and toward specialties. Part of that stems from the fact that specialists are paid more than generalists.
Most of us understand that most of our medical care will take place in our latter years with the obvious exception of certain genetic and chronic diseases which afflict a portion of the younger population. So Medicare, which kicks in at 65 whether you want it or not, is a major payer (and player) to family practice doctors who care for older Americans that make up the bulk of their practice.
With that being the case, we’re seeing fewer and fewer medical students option to become family practitioners, preferring the more lucrative pay specialists earn. The consequent result of low pay, huge patient loads and little recourse for changing that has seen family practice numbers in medical universities drop alarmingly. Why spend all that time and money learning a particular craft when the rewards aren’t as great as you want?
So here we have the market for family practitioners reacting to a distortion in the market created by the government refusing to pay at what the doctors feel is an adequate rate for the treatment of the majority of their patients. The market’s feedback mechanism sends the signal to the potential doctor to look at areas which would be more lucrative than family practice to receive adequate compensation. That area is specialization.
The reason I bring this particular example up is the competing proposals. One say, “hey, if you want more family practitioners, pay them more – that provide the incentive to become a generalist”. On the other hand, there’s a proposal to do that, but to accomplish that increase at the expense of specialists who take medicare.
How do you suppose specialists will react? Well if they do as two of mine have, they’ll simply say, “sorry, we don’t treat Medicare patients”.
And how do you suppose such a decision would effect the number of family practitioners. Well, that would depend on how much they’re willing to increase payments to them.
In the era of massive budget cuts and the promise by government to “decrease” the costs of health care, any increase in my estimation, would by minimal and not enough to change the tide concerning family practice. But taking that increase out of what is paid specialists certainly might be the tipping point for many of them to declare they’ll no longer treat Medicare patients.
Certainly our old friend the Law of Unintended Consequences again at work.
You know, when you’re in DC it seems such a calm and beautiful place, and yet, the cynical machinations of politicians continue unabated.
We now have Nancy Pelosi under fire for essentially sanctioning the “advanced interrogation techiniques” by not speaking up against them or opposing them when she was briefed about their use many years ago:
Nancy Pelosi didn’t cry foul when the Bush administration briefed her on “enhanced interrogation” of terror suspects in 2002, but her team was locked and loaded to counter hypocrisy charges when the “torture” memos were released last week.
Many Republicans obliged, led by former CIA chief Porter Goss, who is accusing Democrats like Pelosi of “amnesia” for demanding investigations in 2009 after failing to raise objections seven years ago when she first learned of the legal basis for the program.
She and her staff can be as “locked and loaded” as they wish, but the fact remains that she’s said nothing about the use of those techniques for 7 years – not a single, solitary word to anyone about opposing them on any grounds.
So the use of these techniques wasn’t something which was going on in a dark corner out of the view or knowledge of Congressional leadership. Democrats have tried to sell that as the “conventional wisdom” – a fascist and authoritarian president making decisions that violate human rights behind closed doors and without the knowledge of the enlightened Dems who would surely have stopped it if they had only known.
But they did know – and said nothing. In the realm of Washington politics that is the same as giving something sanction.
More importantly, Democrats would like for you to believe that these things took place due to an out-of-control executive branch. However, and as usual, this all took place because both Republicans and Democrats in Congress allowed it to take place. When you have the information necessary to stop something you supposedly oppose and do nothing, you become as complicit as anyone.
So as I said in the beginning, Pelosi’s staff as “locked and cocked” as they wish, and they can spin it until they puke, but the fact remains she can’t plead ignorance and she certainly can’t say she did or said anything in opposition, and that that speaks louder than anything her spin machine can gin up in her defense.
Whether or not you agree with the use of the techniques doesn’t change the fact that when it came to “put up or shut up” time where leadership and principle were called to the fore, Nancy Pelosi blew it and any criticism or spin she or her staff now puts forward has the horrific stench of hypocrisy emanating from it.
We’re known here at this blog for being adamant about denouncing plans which appease terrorists. It’s a absolute no-win situation for the appeaser. Pakistan is now in the middle of learning that hard lesson:
Pakistan’s strategy of trying to appease Taliban militants is showing signs of backfiring, as extremists move within 60 miles of the capital and threaten to spread their influence throughout the country.
Really? What a surprise. They caved to the Taliban demands and allowed them to impose Sharia law in the Swat valley in return for promises the Taliban would lay down their arms.
And, unsurprisingly, the Taliban have reneged on the promise. That, of course, has Hillary Clinton huffing and puffing at Pakistan:
Secretary of State Hillary Rodham Clinton warned Wednesday that Pakistan’s government is “basically abdicating to the Taliban” by agreeing to let them implement Islamic law in the Swat region last week. Instead of putting down their weapons, as the government had hoped, the insurgents have since moved fighters into the neighboring Buner region, local lawmaker Istiqbal Khan said.
Of course that’s precisely what appeasement buys with zealots. Absolutely nothing except an even weaker position for the appeasers.
Additionally, the Taliban have turned the Swat valley into a theocratic hell while the Pakistani government stands by and tut-tuts:
President Asif Ali Zardari has blamed the Taliban for a wave of assassinations in Swat in recent months, and he condemned a recent video that showed militants flogging a young woman they accused of having an improper relationship.
There is a glimmer of good news however. There seems to be a public backlash building among Pakistanis with even conservative members of the Pakistani parliament distancing themselves from the militants. However in the complicated world of Pakistani politics, that may end up meaning nothing in a real sense as the Taliban, who recognizes no authority and certainly no obligation to live up to any promises, relentlessly pushes to expand its hold on northern Pakistan.
Nick Gillespie at Reason is none too impressed with the new Edward M. Kennedy Serve America Act just signed into law.
At a mere 5.7 billion dollars +200 mil in “stimulus” funds – and yes I’m being facetious (and don’t worry, they’re saving 100 mil among the administration cabinet) – we get legislation that:
reauthorizes and expands national service programs administered by the Corporation for National and Community Service, a federal agency created in 1993. The Corporation engages four million Americans in result-driven service each year, including 75,000 AmeriCorps members, 492,000 Senior Corps volunteers, 1.1 million Learn and Serve America students, and 2.2 million additional community volunteers mobilized and managed through the agency’s programs.
Or an expansion of the Community Organizer’s Full Employment Act if you really want to come clean about it.
Paid “volunteerism”. Is that government’s job?
And as Gillespie points out, the language under which this is organized – and I use the term loosely – is rife with opportunities for urban entrepreneurs to “benefit” mightily from things which will be extremely hard to measure (even though it claims, in the language, to have it covered):
The Serve America Act, which goes into effect on October 1, would increase and enhance opportunities for Americans of all ages to serve by increasing AmeriCorps from 75,000 to 250,000 positions over the next eight years, while increasing opportunities for students and older Americans to serve. It will strengthen America’s civic infrastructure through social innovation, volunteer mobilization, and building nonprofit capacity. The new law is also designed to strengthen the management, cost-effectiveness and accountability of national service programs by increasing flexibility, consolidating funding streams, and introducing more competition.
Ye gods – what could go wrong with that?
And this, as Gillespie points out, in the face of attempts to limit charitable tax breaks for the income class which makes most of those donations and are the engine for much of the charitable giving. Make sense?
Well, it does if your entire focus is to see how dependent on government you can make the population, certainly. This is another example of a liberal wet dream.
But what you should keep in mind is it was begun under Clinton and survived 8 years of a Republican administration.
Tell me – whose fault is that?
Sometimes math is actually pretty easy. For example, when someone, say some MIT professors, writes a report claiming that a tax on certain businesses will raise a specific amount of revenue for the government ($366 Billion to be exact), and that revenue is divided by an estimated number of American households (117 Million), there isn’t any doubt about how much money per household that tax represents ($366 b./117 m. = $3,128.21). Unless, that is, there are politics involved. Then the math becomes Bistromathic, which allows one of the progenitors of the original numbers to declare “you’re doing it wrong!” and almost everyone will believe him. Unfortunately for them, real math operates on real facts, and thus reality is destined to intrude upon their fantasy.
That, in a nutshell, is basically how the argument over costs of the Obama Administration’s cap and trade policy has unfolded. MIT’s John Reilly co-authored the original study, Republicans used the numbers to derive a cost per taxpayer, Reilly balked, and the media/leftosphere went into paroxysms of outrage about how the GOP were all a bunch of liars. But that was just the main course. For dessert, there will be crow (my emphasis):
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”, 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).”
While $800 is significantly more than Reilly’s original estimate of $215 (not to mention more than Obama’s middle-class tax cut), 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 $3,900 per year.
The $800 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 [$800].”
In Reilly’s view, the $3,128 taken through taxes will be “returned” to each household whether or not the government cuts a $3,128 rebate check to each household.
In short, Reilly’s claim of “you’re doing it wrong!” amounts to parsing of direct vs. indirect costs. Yes, the cap and trade taxes will be passed onto the consumers in some way, but those aren’t the “real costs” to the economy. Only those direct expenditures made necessary by the policy (the “but for” costs) are “real costs.” As long as the federal government provides a benefit to the taxpayers with the cap and trade taxes, then those higher utility bills are a wash:
In Reilly’s view, the $3,128 taken through taxes will be “returned” to each household whether or not the government cuts a $3,128 rebate check to each household.
He wrote in an email:
It is not really a matter of returning it or not, no matter what happens this revenue gets recycled into the economy some way. In that regard, whether the money is specifically returned to households with a check that says “your share of GHG auction revenue”, used to cut someone’s taxes, used to pay for some government services that provide benefit to the public, or simply used to offset the deficit (therefore meaning lower Government debt and lower taxes sometime in the future when that debt comes due) is largely irrelevant in the calculation of the “average” household. Each of those ways of using the revenue has different implications for specific households but the “average” affect is still the same. […] The only way that money does not get recycled to the “average” household is if it is spent on something that provides no useful service for anyone–that it is true government waste.
He added later: “I am simply saying that once [the tax funds are] collected they are not worthless, they have value.”
Essentially, Reilly is making the pernicious claim that a dollar in the taxpayer’s hand is the same as one in the government treasury. But we all know that’s not true, including (I’ll bet) Mr. Reilly.
No matter how efficient the government is, it will never be able to take $X from me and return exactly $X of benefit. Indeed, at least some portion of that $X will be needed just to support the system of taking the money and providing the benefit. Already the taxpayer is at a loss.
Moreover, there is an implicit assumption in Reilly’s explanation that, in exchange for this de facto tax, the government benefits provided would be returned in proportion to their costs. But that would defy all historical precedence when it comes to the federal government which, once the money is received, tends to dole it back out to suit its own purposes. As Merv aptly states:
I really doubt the government will return any cost of cap and trade dollar for dollar. If they did it would be just an expensive money swap. To the extent the government does return any money you can bet that it will be based on conduct they want from people and not unconditionally. They will be imposing their choices on American families and their lifestyles.
To be fair, Reilly tacitly acknowledges this fact when he explains what use of his numbers would be acceptable to him:
“If the Republicans were to focus on that revenue, and their message was to rally the public to make sure all this money was returned in a check to each household rather than spent on other public services then I would have no problem with their use of our number.”
The fact is, cap and trade is going to cost taxpayers significantly more than the measly $13/week tax cut that the Democrats and the left are so excited about. While the $3,900 cost cited by John McCormack above is an accurate accounting of what Reilly’s study portends, even that is probably an unrealistically low estimate. Consider how the same policy has affected Europe:
Europe’s experiment with cap and trade has turned into a bureaucratic mess that has failed to live up to its initial expectations. A report by the GAO reveals that the supply of carbon permits has exceeded the demand causing allowance prices to fall substantially. This policy failure has caused the European economy to suffer and expectations to reduce CO2 emissions have been lowered.
Additionally, Europe’s cap and trade experiment has led to decreased employment opportunities and higher energy prices across the continent. In France manufacturers have packed up and left for Morocco. In the Netherlands factories are forced to close early to meet emissions standards. In Germany energy prices have risen 5% each year sparking widespread outrage. All across Europe evidence shows that cap and trade has hurt the economy. If the United States implements a European style cap and trade system, estimates show that it could wipe out between 1.2-1.8 million American jobs by 2020.
So the 95% of you who received a “tax cut” from Obama had better start saving that extra money up. You’re going to need every penny to service the debt required to pay for your costs of cap and trade.