Cap(Tax) and Trade (Tax)

Due to a lack of interest by readers on the break down of the Cap and Trade fiasco I will not be publishing a complete breakdown, section by section. I will from time to time take a section that may have some interest to readers and do a comment section on that part only.

For those few who were looking forward to the break down, I apologize but when a sampling of readers was taken there was little interest. Most considered it too long, demanding to read and too dry for their taste.

There are links that will give you a section by section breakdown without my comments and other resources comments as well. I will post those at some future date for your convenience.

Thank you for reading and commenting on the original post.

I will return in a day or so with something that may be of interest to the basic reader of this lowly Blog. Until then, enjoy the weekend and stay safe.

Cap(Tax) and Trade (Tax)

Beginning with this post will be an overview of the Cap and Trade Bill or as it is better known in more conservative circles, Crap and Tax Bill.  The Bill has passed the house , in the dark of night and right before a recess which seems to be the norm for the leftist regime currently ruling Congress. The Bill is being stalled in the Senate due to the so called Immigration Reform Bill or as is better known in conservative circles,  Buying Votes for Democrats.  The Bill is being presented to the American people as a Climate Bill which is a way of hiding the fact that it is a TAX BILL, pure and simple that will raise the cost to every man, woman and child in the US.  

Today's post will take a look at some of the cost and the HIDDEN COST within the bill. The administration is touting the bill as costing only a small amount to each family but the true cost, just as with Health Care are well concealed.

In future post we will look at the Bill section by section and hopefully educate the uninformed on just how negatively this Bill will affect each and every person in this country.  Yes, the reading may be long at times  and a bit dry but it is important that we understand what is happening to America and the results that it will have on our country.

CBO REPORT ON COST

Reducing emissions to the level required by the cap would be accomplished

mainly by stemming demand for carbon-based energy by increasing its price.

Those higher prices, in turn, would reduce households’ purchasing power. $245 NET cost per household and that is just the beginning!

The costs would be incurred through higher prices for the goods and services that

households consumed, and the incidence of those costs would be determined

primarily by households’ consumption patterns.

Gross compliance costs would consist of the cost of emission allowances, the cost

of both domestic and international offset credits, and the resource costs incurred

in order to reduce the use of fossil fuels:

The cost of the allowances. The cost of acquiring allowances would become a

cost of doing business. In most cases, the firms required to hold the

allowances would not bear that cost; rather, they would pass it onto their

customers in the form of higher prices

The cost of both domestic and international offset credits. Like the cost for

allowances, the cost of acquiring offset credits would be passed on by firms to

their customers in the form of higher prices.

According to CBO’s estimates, the gross cost of complying with the GHG cap and-

trade program delineated in H.R. 2454 would be about $110 billion in 2020

(measured in terms of 2010 levels of consumption and income) That’s $890 per household.

But there are more hidden cost, keep reading!

Households and governments would bear

those costs through their consumption of goods and services. Because households

account for the bulk of spending, they would bear most of the costs. The federal, state

and local governments would bear the remainder (an estimated 13 percent)

through their spending on goods and services.  Again the taxpayer will bear the cost

3 The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap. The reduction in GDP would also include indirect general equilibrium effects, such as changes in the labor supply resulting from reductions in real wages and potential reductions in the productivity of capital and labor.The cost of obtaining allowances would be passed into prices in most cases because that cost would raise firms’ variable production costs

Some additional transfers of income and additional costs would result from the

GHG cap-and-trade program under H.R. 2454 but are not reflected in the gross

compliance costs and the disposition of the allowance value discussed above.

Those additional transfers would total about $14 billion, but they would also add

close to $12 billion to the government’s costs, which ultimately would be borne

by households through higher taxes or reduced government spending. They would

include the following:

The cost of the rebates and credits would exceed that allowance

value by $2.8 billion, CBO and the Joint Committee on Taxation (JCT)

estimate. That amount would add to the sums received by households but

would also increase the cost to the government.  We all are smart enough to know what that means.

Increases in government benefit payments that are pegged to the consumer

price index, such as Social Security benefits:.

 Under the assumption that the costs of compliance are passed through to consumers in higher prices and that

the Federal Reserve does not take action to offset those price increases, the

rise in the consumer price index would trigger increased cost-of-living

benefits in indexed programs.5 The increase in those transfer payments would

help offset the increased expenditures for the households that received them.

At the same time, increasing those payments would impose a cost on the

federal government.

Reduced federal income taxes:

 Because the federal income tax system is largely indexed to the consumer price index, an increase in consumer prices with no increase in nominal incomes would also reduce federal income taxes.

That effect would increase households’ after-tax income but would also add to

the federal deficit.  BUT THIS IS SUPPOSE TO BE DEFICIT NEUTRAL!!

This is how they cook the books to do the DEFICIT NEUTRAL :

Section 496, Deficit Neutrality:

Ensures that funds established in sections 422, 467, and 480 are treated as separate accounts in the Treasury.

The net economy wide cost of the GHG cap-and-trade program would be about $22 billion—or

$175 per household.

Four factors account for that net cost:

The purchase of international offset credits (about $8 billion),

The cost of producing domestic offset credits (about $3 billion),

The resource costs associated with reducing emissions (about $5 billion), and

The allowance value that would be directed overseas (about $6 billion).

Just who receives this money being sent overseas?  Answers will be shown in future post.

The magnitude of transitional costs would also be affected by international trade,

especially for goods or services that embody large amounts of GHG emissions.

The cost of producing such goods in the United States would rise under the capand-

trade program, thereby disadvantaging producers of those goods relative to

foreign competitors that did not face a similarly stringent program for reducing

emissions. Although large segments of the U.S. economy either do not face

significant foreign competition (for example, the electricity and transportation

sectors) or involve trade with countries that have a cap-and-trade program (the

European Union, for example), some important manufacturing industries, such as

steel, face competition from countries that do not face the costs of such a system.

Some regions and industries would experience substantially higher rates of

unemployment and job turnover as the program became increasingly stringent.

That transition could be particularly difficult for individuals employed in those

industries (such as the coal industry) or living in those regions (such as Appalachia).

The largest part of the gross cost of the program would stem from holding

allowances and purchasing offsets. Those costs would become a cost of additional

production for firms subject to the cap on emissions, which they would generally

pass on to their customers in the form of higher prices. The prices of goods and

services throughout the economy would rise on the basis of the CO2 emissions

associated with their production and consumption. Goods and services resulting in

greater emissions would have larger price increases; for example, the price of

electricity would increase more than the price of food.

Another portion of the gross cost is the resource costs of implementing the

legislation. Those resource costs would include expenditures that firms and

households made to reduce their emissions (for example, by generating electricity

from natural gas rather than from coal or by installing insulation) as well as

inconvenience costs (from driving less, for instance). CBO reports all of those

costs in dollar values and has assumed that households would bear those costs in

proportion to their consumption of goods and services that result in CO2

emissions. Thus, households that consumed relatively large shares of fossil-fuelintensive

goods and services prior to the policy would bear the cost of either

reducing those emissions or purchasing allowances and offset credits.  :LIKE HAVING TO BUY HEALTH INSURANCE?

In total, households in the highest income quintile would bear an

estimated 36 percent of the gross cost associated with the cap, and their annual

expenditures would increase by about $1,380… As we can now see it is the segment

of the population, known as producers and production makers who will bear the cost.

Although the increase in out-of-pocket expenditures because of the higher prices

would be substantially larger for high-income households than for low-income

households, they would impose a larger burden—measured as a share of

income—on low-income households. WHAT  A TAX ON THE POOR!

So much for cutting taxes for 95% of Americans.

That increased cost would account for 2.5percent of after-tax income for the

average household in the lowest income quintile, compared with 0.7 percent of

after-tax income for the average house holdin the highest quintile.

That difference occurs for two reasons: Lower-income

households consume a larger fraction of their income, and energy-intensive goods

and services make up a larger share of lower-income households’ expenditures.

By CBO’s estimates, 25 percent of the direct relief

to households would go to households in the lowest income quintile and

50 percent to households in the two lowest quintiles combined. On average, the

amount of direct relief would offset 94 percent of the additional expenses that

households in the lowest quintile incurred.

Sounds good so far for lower income and low middle income BUT.

In contrast, the direct relief received by households in the highest quintile would

offset only 18 percent of their added costs.

CBO estimates that about 63 percent of the allowance value conveyed to

businesses would ultimately flow to households in the highest income quintile.11

On average, that relief would offset $885 of the additional expenses of those

households resulting from the higher prices. In contrast, households in the lowest

income quintile would receive only an estimated 5 percent of the relief targeted to

businesses—an average of $65 per household. 

9Trade-exposed industries might not be able to increase their prices to reflect the higher costs that  they would face as a result of the cap. As a result, the cost of the cap might fall on workers and  shareholders in those industries rather than on their customers. Correspondingly, the relief aimed at those industries (which would be linked to their level of production) would tend to offset costs that workers and shareholders in those industries would otherwise incur. CBO assumed for this  analysis that the cost of complying with the cap would lead to price increases for those industries.

The cost for families will run into the thousands of dollars rather than the supposedly few hundreds as touted by the administration as anyone can see just within this letter from the CBO.  We all know that the CBO often underestimates the REAL COST until after the measure has passed and then they come back , as they did with NOCARE HEALTH CARE, and reveal that the cost will run trillions over their original estimate. 

This Bill, if passed ,will complete the destruction of the US economy and take us one step closer to being controlled by a global governing body.  I  for one am not ready to see my country destroyed.

A New Global Tax Coming?

There is a new tax coming in form of a VAT, not the VAT that you have heard about in recent days that taxes every item consumed, produced and used by Americans but one that will put US CITIZENS into the tank paying a GLOBAL TAX.  This is actually nothing new since it was presented and AGREED to by the participants of the  G-20 SummitThat of course included “dear leader Obama” who believes he is the “world leader”.

Of course Glenn Beck mentions this today, actually telling the truth on the matter, and the leftist go wild in refuting him instead of doing their homework and see that what he said is real, not made up.  I have been reading blogs since this afternoon after his statement and the remarks are from silly, stupid, to downright hate filled threats against someone who would report the truth.

This is not the first such tax that the IMF has given support to which would tax US CITIZENS on a global level. The original tax was called the Tobin Tax which has since been revised by George Soros (the man who broke the Bank of England and destroyed other economies as well).   I wrote about the subject sometime ago. (Tuesday, September 9, 2008  Barack Hussein Obama, George Soros, the Tobin Tax and the Tie That Binds)

George Soros had taken the Tobin Tax a step farther and created what he calls SDRs, or Special Drawing Rights, which is the method by which the taxes would be distributed. SDRs are part of a country's official foreign exchange reserves. They serve as a means of payment among Fund members. IMF creates SDRs "through a process of allocation and distribution to IMF members (International Monetary Members, created by the UN)." Before the U.S. could become involved in this scheme, it would have to be implemented by the U.S. Congress. This is how. It is of and by Barack Hussein Obama and his Global Poverty Bill which has been sitting around awaiting the right time to be placed into the voting format. Of course some other Senator would put the Bill forth and give Obama some credit for “thinking up such a great well to help the poor around the world.

Soros sees in this pending SDR allocation a readily available means "to finance the provision of public goods on a global scale as well as to foster economic, social, and political progress in individual countries ..." (Richer countries would donate their SDR allocations to specific improvement projects in poorer countries. Poorer countries would keep their allocations as an addition to their monetary reserves. Can you say, redistribution of wealth?)

TheVAT tax, just like any other tax will add an additional burden to those already paying the bulk of taxes PLUS those who pay NO taxes. But some argue “shouldn’t everyone pay taxes?”  Of course they should but they should not be a regressive tax as the VAT has been shown to be. Since VAT is a tax on consumption rather than income or investments, it’s considered a regressive tax. Poor people, who tend to spend a higher percentage of their income than wealthier ones, are disproportionately affected by consumption-based taxes. In the U.S., regressive sales taxes are balanced out by a progressive income tax structure. There would be no such tax to balance out the consequences of the Global VAT tax.  

Countries are broke and looking for a fast buck to bail them out, mainly through taxes rather than reduced spending. The US is no different and taxes are what will pay for all of Obama’s programs regardless of the consequences.

When the world goes broke, what is left?   Let me just say, one heck of a fight for what little is left and folks it ain’t gonna be a pretty fight.  It will be all out war for who can control the rest. Of course the first ones that will have to be taken out of the fight will be the elite who will be controlling what little is left. They will control not only the purse strings but the weapons of war as well to a great extent. But they won’t control all of them and it will be war. Could it spell Armageddon?  You decide!

The Left is Running Scared

The radical leftist are up to the old tricks that Hitler and others used in the last century.  Things have not changed a great deal for the leftist in the past one hundred years or even two thousand years when the Jewish Pharisees planted people in the crowed to call for the release of Barabas rather than Jesus Christ.  The left is so fearful of the uprising by the people that they will go to any means to stop dissent.  Violence has often occurred when the left has planted instigators in crowds and of course those who are exercising their right to peaceful assembly and free speech are most often blamed.  Casting “we the people” as violent and fringe loonies is the plan by the Obama ruling elite.  Let us hope that these Crashtheparty loons are discovered and shown to be what they are. 

  

"A group named Crashtheparty.org is planning on attending Tea Party rallies around the country tomorrow pretending to be party members. The strategy is to behave outrageously on Tax Day to provide fodder for the media, which likes to portray opponents to the Obama presidency as fringe radicals. The plot is part of the typical liberal playbook to silence opposition to the left-wing agenda. The party crashers already have dropped into Tea Party meetings and rallies to stake out vulnerabilities. According to Jason Levin, head of Crashtheparty.org, the group has affiliates in 65 cities across the land. He unconvincingly claims that his group's bizarre antics will simply reflect the hidden views of Tea Partiers. 'Do I think most of them are homophobes, racists or morons? Absolutely,' Mr. Levin told Associated Press. The saboteurs' Web site leaves no doubt about the methods being employed. 'Whenever possible, we will act on behalf of the Tea Party in ways which exaggerate their least appealing qualities (misspelled signs, wild claims in TV interviews, etc.) to further distance them from mainstream America and damage the public's opinion of them,' the site informs. ... 'They can't actually debate our message, and that's their problem,' explains Bob MacGuffie, an organizer for a Tea Party group with members in Connecticut, New York and New Jersey. The Democrats' desperation shows that Mr. MacGuffie is right on target. Polls show the American public is angry about the explosion of government power during the Obama presidency and Democratic control of Congress. Liberals in power don't have thoughtful responses to popular criticism, so they are trying to ostracize skeptical thought and intimidate those brave enough to stand against the bureaucratic juggernaut." --The Washington Times

Hat Tip: Article from the Patriot Post 4/14/2010