Representatives Henry Waxman (D-CA) and Ed Markey (D-MA) have proposed a cap and trade bill to purportedly help fight global warming. Though the proposed legislation will have little impact on world temperatures, it is a massive energy tax in disguise that promises job losses, income cuts, and a sharp left-turn towards big government.
President Barack Obama described the plan best when he said [u]nder my plan of a cap and trade system, electricity rates would necessarily skyrocket. And skyrocket they will. In total, a typical family of four will see its energy costs rise by over $22,800 from 2012-2035.
But it gets worse. When energy costs increase, the costs of all goods and services increase. Businesses have to pay a higher overhead, and they pass that on to consumers. Manufacturers, an energy-intensive industry, will have to pay more to produce their products, so the price of their products will rise to reflect the higher costs of production. The $22,800 does not include this higher cost of living, nor does it include the higher expenditure for such things as more energy efficient cars and appliances or the disutility of driving smaller, less safe vehicles or the discomfort of using less heating and cooling.
Because almost every industry and American uses some form of fossil fuel-based energy, the impact of an energy tax of this level will be disastrous to the American economy. For example, The Heritage Foundations Center for Data Analysis has found that by 2035 the Waxman-Markey bill will have the following economic impact:
- Reduce aggregate Gross Domestic Product (GDP) by $9.6 trillion
- Destroy up to 2.5 million jobs in some years
- Raise electric rates 90%, gasoline prices by 74%, and natural gas prices by 55% after adjusting for inflation
- Raise a typical family’s average annual energy bill by $1,500
With unemployment at 8.9%, now is not the time to subject our economy and American families to such a burdensome tax. The impact of Waxman-Markey on the next generation of families is thousands of dollars per year in higher energy costs, over $116,600 of additional federal debt (above and beyond the unconscionable increases already scheduled), a weaker economy, and more unemployment. And all for a change in world temperature that might not be noticeable.