Who is being taxed?
Hit hardest would be the "95% of working families" Mr. Obama keeps mentioning, usually omitting that his no-new-taxes pledge comes with the caveat "unless you use energy." Putting a price on carbon is regressive by definition because poor and middle-income households spend more of their paychecks on things like gas to drive to work, groceries or home heating.Oh, but wait, it gets better. We now need to add in the redistribution part of the scenario.
The Congressional Budget Office -- Mr. Orszag's former roost -- estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That's about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all five of them).
Democrats say they'll allow some of this ocean of new cap-and-trade revenue to trickle back down to the public. In his budget, Mr. Obama wants to recycle $525 billion through the "making work pay" tax credit that goes to many people who don't pay income taxes. But $400 for individuals and $800 for families still doesn't offset carbon's income raid, especially in states with higher carbon use."Trickle back" is so entertaining that I just giggle every time I read it. Someone appears to be pissing down my neck and keeps telling me that it's raining. No doubt this will be great for no one.
Oh, and I did get my first pay check under the new stimulus package. I got nothing. What a shock.
I'm so thrilled with hope and change.
Maybe Obama would be less tired if he spent more time on things that make sense rather than all this stupidity. (He'd also piss off less of our close allies. Funny how Bush was so vilified for that and Obama is wonderful for doing worse.)