May 2009

In the News

by William Yeatman on May 14, 2009

What If Global Warming Fears Are Overblown?
John Birger, Forbes, 14 May 2009

With Congress about to take up sweeping climate-change legislation, expect to hear more in coming weeks from John Christy, director of the Earth System Science Center at University of Alabama-Huntsville.

The Cap-and-Trade Racket
David Frum, The Week, 14 May 2009

Who says Democrats wish to take from the poor to give to the rich? In practice, they much prefer to take from everyone to give to their friends!

Give the Skeptics a Voice, Too
Dr. William Porter, Atlanta Journal Constitution, 14 May 2009

But the science is not settled. If it were, we would have great confidence in all these statements: 1. The world is getting warmer. 2. That’s more bad than good. 3. Humans are causing the warming. 4. We know how to fix the problem.

Adviser Admits Obama’s Tax Increases May Kill Economic Recovery

by Hans Bader on May 14, 2009

in Blog

Harvard economist Martin Feldstein, who has advised Obama, warns that “the barrage of tax increases proposed in President Barack Obama’s budget could, if enacted by Congress, kill any chance of an early and sustained recovery.” He compares Obama’s tax increases to the ones that contributed to the Great Depression and the “Lost Decade” of economic stagnation and decay in Japan.

Feldstein, who serves on Obama’s economic advisory board, has also “warned of serious inflation and higher taxes down the road” as a result of Obama’s policies.

Feldstein singles out for criticism Obama’s proposed global-warming tax. “Mr. Obama’s biggest proposed tax increase is the cap-and-trade system of requiring businesses to buy carbon dioxide emission permits. . .CBO Director Douglas Elmendorf testified before the Senate Finance Committee on May 7 that the cap-and-trade price increases . . . would cost the average household roughly $1,600 a year, ranging from $700 in the lowest-income quintile to $2,200 in the highest-income quintile.”

That’s a highly regressive tax increase, since lowest-income earners don’t make a third of what highest-income earners make, but they would incur a third as much cost. It’s regressive in the same way as the 1932 excise tax increase by Herbert Hoover that deepened the misery of the Great Depression.

During the Great Depression, Herbert Hoover damaged the economy, and impoverished the American people, with costly, artificial attempts to stimulate the economy through increased government spending, financed by heavy taxes like the Revenue Act of 1932.

Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” As Obama admitted, that cost would be directly passed “on to consumers” — just the way Herbert Hoover’s regressive excise taxes were in 1932. Although the tax’s supporters claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air.

In reality, Obama’s proposed “cap-and-trade” tax is likely to raise $2 trillion over the next decade, far more than even Feldstein anticipates. That’s far more than the $646 billion the Administration earlier estimated — amounting to at least $3,100 per family per year. And that figure may be dwarfed by the amount of money siphoned from consumers to well-connected corporations that have learned how to game “cap-and-trade” schemes.

In the Great Depression, President Herbert Hoover raised marginal tax rates to 63%, and went on a deficit spending binge. Similarly, Obama has proposed higher marginal tax rates, which will produce another $1.9 trillion in tax increases.

In spite of its massive size, Obama’s carbon tax won’t begin to pay for all his spending increases, such as a budget that will generate $4.8 trillion in increased deficits, Obama’s trillion-dollar toxic-asset program, and his $800 billion, economy-shrinking “stimulus” package, all of which contradict Obama’s campaign pledge of a “net spending cut.”

These tax increases are breaches of Obama’s campaign promise not to raise taxes on people making less than $250,000 a year, which he earlier broke by signing into law the regressive SCHIP excise tax increase.

It’s part of a long line of broken promises, such as Obama’s pledge to enact a “net spending cut,” which he discarded by offering mind-bogglingly large budgets that will explode the national debt through $9.3 trillion in massively increased deficit spending.

Three Dems Targeted on Waxman’s Subcommittee

by Paul Chesser, Heartland Institute Correspondent on May 13, 2009

in Blog

The National Wildlife Federation Action Fund, the “grassroots lobbying arm” of NWF (you know, they only educate), announced last week that “hunters and anglers” (as though NWFAF represents that unified group) are running ads in Democrat-held swing districts (PDF) of three congressmen ahead of an upcoming expected vote on the Waxman-Markey cap-and-energy-tax legislation:

“Hunters and anglers want fast action to safeguard natural resources and reduce the effects of climate change in the places where they fish and hunt – places they want to protect for their children and grandchildren,” said Sue Brown, executive director of the National Wildlife Federation Action Fund. “The ads send a clear message that the nation’s sportsmen and women want a strong bill from the committee that will reduce global warming pollution and invest in our natural resources.”

The sportsmen were so incensed that they showed up en masse at Congress’s doorstep:

Dozens of hunters and anglers from across the country visited Capitol Hill, making nearly 100 visits with members of Congress and their staffers and meetings with Administration officials.

How did the representatives (and their staffers) manage to withstand all that political pressure? Almost 100 visits!

Meanwhile the three Congressmen targeted by NWFAF and their casters and shooters are Arkansas’s Mike Ross, Louisiana’s Charlie Melancon, and Utah’s Jim Matheson. All are members of the Subcommittee on Energy and Environment under the Waxman-chaired Energy and Commerce Committee. Here’s what each has said (PDF) recently about Waxman-Markey:

Ross: “If you don’t like $4-a-gallon gasoline, you’re really not going to like your electric bill sometime between now and 2030.”

Melancon: “I believe this bill would create an undue burden on families who are already paying too much in energy bills and on an industry that provides thousands of Louisianians with good jobs.”

Matheson: “The draft bill we are looking at today is a huge piece of legislation,” Matheson said at a hearing recently, bringing up 12 problems he sees with the bill. “It seeks to address an exceptionally complicated issue. I am concerned about moving so quickly.” (Salt Lake Tribune)

NWFAF is running a television ad (“Ducks are coming later; the seasons don’t change like they used to.” — What — are the leaves turning in the spring now?!) in the Little Rock district of Ross, and newspaper ads in Melancon’s (PDF) and Matheson’s (PDF) districts. Word out of DC is that Waxman-Markey has been “watered-down.” Certainly it won’t be enough to alleviate the quoted concerns expressed by the three congressmen.

Massive Energy Tax Taking Shape in Congress

by Myron Ebell on May 13, 2009

Rep. Henry Waxman (D-Beverly Hills), Chairman of the House Energy and Commerce Committee, announced late Tuesday that the full committee would mark up the Waxman-Markey energy rationing bill next week and that he planned to vote the bill out of committee before the Memorial Day recess which begins on 22nd May.  Waxman also released some details of the compromise bill that he and Rep. Edward Markey (D-Mass.) have negotiated with Blue Dog and other moderate Democrats on the committee.

This bill should not be improved; it should be defeated.

Here are some of the key provisions in the new Waxman-Markey compromise energy-rationing bill:

Targets and timetables:

  • 2005 greenhouse gas emissions baseline
  • -17% by 2020
  • -42% by 2030
  • -83% by 2050

Free ration coupons:

  • 35% to local electric distribution companies, phasing out in 10-15 years
  • 15% to energy-intensive industries that compete with imports (steel, cement, paper, etc.), phasing out by 2% per year (as I understand it that would be 13% in year 2, 11% in year 3, etc.)
  • 1% to 5% to oil refineries
  • Remaining coupons would be auctioned.

Sharing the booty:

  • Some revenues raised from auctioning the ration coupons would be dedicated to helping the auto industry and renewable energy.

Renewable requirements for electric utilities:

  • 20% total renewables and efficiency gains
  • 15% renewables by 2020
  • 5% efficiency improvements by 2020
  • With a 3% swing.  For example, 12% renewable plus 8% efficiency gains = 20%.

Threatening a trade war:

The President would be granted authority to levy carbon tariffs beginning in 2025.

Here’s What You Need To Know about the Waxman-Markey Bill

1. It’s a tax.

2. It’s an indirect, hidden, sneaky tax, but it’s a tax.

3. It’s a tax on energy that will raise prices on energy and all goods and services that are produced with or use energy.

4. It’s a tax that will fall more heavily on poorer people because poorer people spend a higher percentage of their incomes on energy than do wealthier people.

5. It’s not a one-time or steady tax, but a tax that will cause energy prices to increase every year.

6. It’s a tax that will destroy jobs in energy-intensive industries, which are concentrated in the States that use coal for electricity.

7. It’s a tax that will raise energy prices more in States that depend on coal for electricity.

8. It’s a tax that will create perpetual economic stagnation.

In the News

by William Yeatman on May 13, 2009

EPA U-Turn: “Endangerment” Might Not Mean Regulation
Ian Talley, Wall Street Journal, 12 May 2009

The head of the U.S. Environmental Protection Agency said Tuesday a finding that carbon dioxide and other greenhouse gases are a public health danger won’t necessarily lead to government regulation of emissions, an apparent about-face for the Obama administration.

The Deep Ecologists
Peter Hannaford, American Spectator, 13 May 2009

America’s “mainstream” media missed it, but April 17 was a red-letter day for its Deep Ecologists. Red letter because it was the day the Obama Administration declared that carbon dioxide and five other gases emitted by industry threaten “the health and welfare of current and future generations.” This opens the door to regulations by the Environmental Protection Agency to “cap” emissions. The Deep Ecologists see this as the path to their cherished dream of a less populous nation with greatly reduced industrial production. It will also lead to a poorer (they would call it “simpler”) standard of living.

Obama’s Anti-Energy Plan
Barry Russell, DC Examiner, 13 May 2009

There’s an old saying among America’s smaller, independent natural gas and oil producers — sometimes called “wildcatters” — that the best way to end up with a million dollars is to start off with a billion.

Government Green Schemes Never Work

by William Yeatman on May 13, 2009

in Politics

The DC Examiner yesterday reported on a “green” car sharing program in Montgomery County that is wasting taxpayer money hand over fist. Since January, the County has been paying Enterprise Rent-a-Car $1,100 a month per car for the use of 28 fuel efficient automobiles. As of April 24, the vehicles have been used a total of 83.5 hours, which means that Maryland taxpayers have paid more than $1,300 an hour to use the cars. For comparison, consider that a limo costs $60 an hour.

This is not the first lame brained green car scheme to go awry. A year ago, Bloomberg reported on a federal program to buy flex-fueled cars that can run on E-85, a fuel blend containing 85% ethanol. E-85 supposedly is less carbon-intensive than gasoline, so the program was meant to reduce greenhouse gases. However, there was one big problem: Federal employees found it more convenient to use gasoline than E-85, which isn’t availible in most fueling stations. As most flex-fueled cars are gas-guzzling sports utility vehicles, the program actually resulted in increased gasoline usage and higher greenhouse gas emissions. Whoops!

Al Gore 1984

by Cord Blomquist on May 13, 2009

[youtube:http://www.youtube.com/watch?v=t3XcIh_n6k0 285 234]

CEI Launches “Al Gore 1984”

by William Yeatman on May 13, 2009

in Features

Can Big Brother be green? Absolutely. If carbon dioxide were the planetary poison that global warming alarmists claim, then every aspect of our lives would be fair game for government control: the homes we build, the cars we drive, the light bulbs we use. Even the number of children we have-because lets face it; any reduction in CO2 that we achieve will be more than offset by the households our kids will create when they grow up.

There are already proposals in Congress and federal agencies to vastly increase taxes and regulations in order to address the so-called global warming crisis. But as a growing number of scientists are openly declaring, there is no crisis.

To let Washington know that you don’t want them controlling access to energy, visit cei.org/1984 and send a letter to your Congressman today.

Massive Tax Increase and Marriage Penalty from Obama

by Hans Bader on May 12, 2009

Obama’s proposed tax increases create a massive financial penalty for married couples, by subjecting them to much higher income taxes than if they had chosen to live together without getting married. (Unmarried people voted decisively for Obama. But as the Associated Press notes, “married people tend to favor” Republicans like McCain).

Under the tax increases contained in Obama’s recent budget proposals, a married couple making $232,000 a year would be in a higher tax bracket than many unmarried couples making $370,000 a year. Simply by getting married, a man and woman making $170,000 each would be pushed up from their current level of 28 percent to 36 percent. But an unmarried couple making $340,000 a year ($170,000 each) would be taxed at 28 percent. And a married couple making $380,000 would be taxed at 39.6 percent — not counting certain adjustments that bring the rate to 40.7 percent. (That’s just the federal standard rate. You have to add to that state income taxes (up to 10.3 percent), and federal self-employment taxes, which many small business owners pay — which could result in marginal rates of well over 60 percent).

Obama’s proposals impose tax increases on any single person making over $190,650. Worse, they increase taxes on all married couples making over $231,300 — even if each spouse only makes half of that, or $115,650, far less than the $190,650 that drives up the rate for singles.

These tax increases are breaches of Obama’s campaign promise not to raise taxes on people making less than $250,000 a year, which he earlier broke by signing into law the regressive SCHIP excise tax increase and by proposing a global-warming “cap-and-trade” energy tax that could charge up to $2 trillion.

It’s part of a long line of broken promises, such as Obama’s pledge to enact a “net spending cut,” which he flouted with proposed budgets that will explode the national debt through $9.3 trillion in massively increased deficit spending.

Here is mega-accounting firm Deloitte’s summary of Obama’s tax increases:

“Tax increases, deduction limitations for high-income earners

Second, Obama’s budget outline delivers on several of his campaign promises to increase income taxes on higher-income individuals, including:

* Reinstating the top two individual income tax rates, currently 33 and 35 percent, at their pre-2001 levels – 36 and 39.6 percent – beginning in 2011. The 36 percent bracket would begin at taxable income of $190,650 for singles and $231,300 for married couples. While the budget proposal does not specifically indicate the taxable income level at which the 39.6 percent rate would apply, under current law for 2009, the highest tax bracket starts at $372,950 for singles and married couples. Presumably, this taxable income level would not likely change significantly for the new 39.6 percent bracket, although the Obama administration says the taxable income levels for this rate would “vary by filing status.” The 28 percent tax rate bracket would be expanded to reflect modifications to the upper limit of that bracket (where the 36 percent bracket would begin).
* Increasing the capital gains and dividends rate to 20 percent for taxpayers in 36 and 39.6 percent tax brackets. The reduced rates on gains on assets held over five years would be repealed. In both cases, the increased rates would apply beginning in 2011.
* Reinstating in 2011 the personal exemption phase-out and itemized deduction limitation, which are scheduled to be fully phased out starting in 2010. Phase-out thresholds would be $200,000 of adjusted gross income for singles and $250,000 for joint filers.

In effect, the Obama budget would raise the top income tax rate, considering these phase-outs, to 40.79 percent.”

Suitable for framing: Barton op-ed on Waxman-Markey

by Marlo Lewis on May 12, 2009

Energy and Commerce Ranking Member Joe Barton (R-TX) hits a home run in this oped, which says everything you need to know about the Waxman-Markey cap-and-tax bill.

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