Why Cap-And-Tax Is A Horrible Idea

What is Cap-And-Trade, or Cap-And-Tax, as it is more properly called?

It is the Waxman-Markey bill, which has recently passed the house by a razor-thin margin, and would place a cap on the total carbon output that the United States can produce over the course of a year, with that total amount decreasing year over year. Oh, and by “the United States”, I mean every business in the country, and you, the Americans who work for those businesses. Imagine being given an amount of carbon that your business can emit over the course of a year, then having to buy excess carbon permits from people who are not using all of their carbon allotment if you go over, or even worse, having to pay large fines if you cannot scrounge up enough carbon offset permits. When you get down to brass tacks, there are three huge problems with this bill:

#1 - It will raise the price of everything, literally, first energy prices, then the food and other goods that we all purchase as virtually every manufacturer and producer scrambles to pay more and more for their carbon permits, then pass that cost on to the end consumer.

#2 – The cost of operating manufacturing equipment will be rising in the U.S. and falling in every nation that has not implemented a Cap-And-Tax policy. Large, multi-nationals will have even one more reason to ship jobs overseas. While this may, in turn, help in the area of rising prices, many more Americans who rely on manufacturing jobs will be out of work.

#3 - While we are screwing ourselves into higher prices to reduce our carbon emissions, this bill does nothing to address the carbon emissions of other nations in the world. China’s carbon emissions are skyrocketing and they will be doing nothing to stop them while we slow down our already reeling economy with this bad piece of legislation.

While support for this bill does cross some party lines, there is clearly only one party that is supporting this bill as stated in the Wall Street Journal: “Even as Democrats have promised that this cap-and-trade legislation won't pinch wallets, behind the scenes they've acknowledged the energy price tsunami that is coming. During the brief few days in which the bill was debated in the House Energy Committee, Republicans offered three amendments: one to suspend the program if gas hit $5 a gallon; one to suspend the program if electricity prices rose 10% over 2009; and one to suspend the program if unemployment rates hit 15%. Democrats defeated all of them."