On Friday, the House of Representatives passed today cap-and-trade tax legislation designed to reduce carbon emissions by raising the prices of oil, gasoline, natural gas, coal, home heating oil, and anything else that produces carbon dioxide emissions, believed to be the main culprit behind supposed global warming. That is estimated to increase costs per family by an estimated $1,600 to $3,200 each year.
During the campaign last year, in the debates, in speeches, and in campaign ads, Barack Obama promised over and over that he would cut taxes for the 95% of Americans making less than $250,000 per year. He pledged that his tax increases would only apply to the top 5% of Americans making over $250,000. Yet Obama fully supported passage of the House cap-and- trade tax bill.
In one nationally televised debate, Obama scorned John McCain's charge that he would raise taxes by insisting that if you make less than $250,000 per year, your taxes will go down, emphasizing the point with a grand downward sweeping motion of his arm. In a speech on September 12, 2008 in Dover, New Hampshire, Obama said,
I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.
The tax cut for 95% of Americans turned out to be a little $400 per worker tax credit, less than $8 per week, just for this year and next. Under the recently passed Democrat budget, that tax cut is gone after next year.
That will be replaced instead with the new cap-and-trade cost burden that will be paid by everyone in the prices of everything we buy, but particularly in electricity (primarily produced by burning fossil fuels), gasoline, natural gas, home heating oil, and food.
Democrats pushing the bill have recently argued that the total costs per family will be trivial, as low as $80 or $175 per year. But the whole purpose of the bill is to raise the price of using carbon-based energy to reduce its use, 17% by 2020 and 83% by 2050. That is probably going to require even more than $3,000 per family per year.
The bill will also result in millions of lost jobs and a weakened economy due to high cost energy. Remaining manufacturing in America will flee overseas. The coal industry will be phased out.
All of this just as the global warming fantasy is intellectually collapsing. Global atmospheric temperatures measured most accurately by satellites have shown declining temperatures for the past 11 years, with the decline accelerating most recently. The latest science explains the twists and turns of temperature trends in the 20th century as due to natural causes. Countries around the world such as France, Poland, Australia, the Czech Republic, and New Zealand are turning against cap-and-trade tax burdens for their own countries, and China and India have rejected the idea for their emerging economies all along. Even global warming advocates admit that the bill passed by the House tonight will have no significant effect in reducing global warming, despite all of its costs for the America people. The science behind the theory of man-made global warming has been thoroughly rebutted in a new 880 page book just released by the Heartland Institute appropriately titled "Climate Change Reconsidered."
Moreover, this appears to be just the beginning of higher taxes for 95% of Americans. Numerous tax increases are being considered to finance Obama's new national health care entitlement program, including a tax on employer provided health benefits. The Washington Post reported that Obama and Congressional Democrats are considering a new federal value added tax (VAT) as well. VAT taxes are common in Europe, where they are embedded in the prices of goods sold, much like a sales tax. Again, the price of everything would go up.
With these and other developments on the horizon Obama is poised to break the central promise of his campaign, which took him straight to the White House. Did Obama win last year on false pretenses? Perhaps he might remember this cautionary tale: When the first President Bush broke his campaign pledge not to raise taxes in 1990, he was booted out in the next election.
Peter Ferrara is Director of Entitlement and Budget Policy for the Institute of Policy Innovation, and General Counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush.
Peter Ferrara formerly served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush. He is presently Senior Fellow for Budget and Entitlement Policy at the Heartland Institute, and at the National Tax Limitation Foundation.