Obama's Hidden Taxes on Energy Consumption

The following piece just arrived in CARE’s in box. Chris Horner is a friend of CARE and we expect him to be a Conference Call guest sometime soon. However, this is the first of his commentaries we’ve featured here. Yesterday, CARE’s executive director, Marita Noon, offered comment before the House Energy Committee opposing New Mexico’s cap and trade legislation (HB653). Therefore this topic caught our attention.

While Chris Horner points out two specific elements in his comments--which are important, we’d like to draw your attention to his point about taxes being withdrawn due to public outrage and elected officials being “driven from office” for their poor choices. While we may feel discouraged--even depressed--and overwhelmed by the decisions being made in Washington, we are not powerless.

Additionally, if you are interested in this topic, we encourage you to check out the comments on this topic from Sterling Burnett during our January Conference Call. You can read the article-ized version of the call’s content in the February CARE Newsletter or listen to a recording of the entire call.

Obama’s 'Cap and Trade' Plan Imposes Huge Tax
In his February 24 speech, President Obama asked Congress to send him “…legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.” But by “market-based cap” he means that the government would mandate carbon dioxide emission permits – which are essentially permits to use energy – that companies would then be able to sell among themselves.

His budget assumes a staggering $650 billion in revenue from this scheme. But who picks up the tab? Who ultimately pays the cost of buying these slices of global warming baloney, and why would industry support such a scheme?

The answer is that you and I do, as does everyone who buys anything requiring energy, just like we pay the cost of all the other taxes paid by manufacturers. It’s a tax, folks. Plain and simple, Obama’s “market-based cap” plan is a tax on American business.

Industry is actually behind this massive tax, having sold their support so that the tax is not merely passed through to consumers, but it allows companies to skim the scheme for a profit, again at your expense.

This tax, however, is nearly twice the size of the failed BTU tax which Al Gore still attributes the Democrats’ loss of Congress the next year.

The BTU tax was offered in the name of deficit reduction. Obama’s global warming tax is expressly to pay for new middle-class welfare entitlements, even though it takes away from the beneficiaries about the same amount they will fork out in increased energy costs (if not the entire inflationary impact). The important point for his movement, however, is that more money is run through the state, creating dependency.

With BTU, the then-new “rock star” Democratic president Clinton was rebuffed by a Democratic Congress once the public fought back. This was only after the House had passed the tax by one vote – cast by Rep. Marjorie Margolies Mezvinsky (D-PA), who tearfully marched down to change her vote after being singled out for flipping by the White House. As she shuffled back up the aisle, a prescient Republican caucus loudly waived “bye, Margie!” knowing the gift she had given them. She was among many BTU-tax supporters later driven from office.

Then business successfully “Swiss-cheesed” the tax proposal by lobbying and achieving so many carve-outs that the tax simply collapsed. With an insufficient business constituency, Democratic Sens. Bennett Johnston, John Breaux and David Boren could not justify so angering the public and instructed the new president how the world would work.

There are two lessons here.

First, as Al Gore confessed to the Financial Times, going through the front door of a direct energy tax is too risky. Hence the cap-and-trade rationing scheme; it’s a tax but a non-transparent one, also making it vastly less efficient (more expensive) according to economists at, for example, the Congressional Budget Office. The message to lawmakers is to worry about one job: yours. Hide the tax. The part about also doubling the tax seems to be all Obama’s idea.

Second, cap-and-trade shows that business has also learned how to sell its support in return for additional schemes to further pick your pocket, siphoning of some of the cost to themselves. Cap-and-trade provides them billions of your dollars in return for playing along.

It’s still so ugly that some senators are exploring ways to actually ram through the scheme itself – and not just the assumptions of revenue from it – on the filibuster-proof budget process. This means they need just 50 votes plus Veep Joe Biden, not 60. It also means there would be no public development, meaning “exposure”, of the scheme.

So there remains a chance that the administration and industry have managed to lock this deal down without the taxpayer represented in the room.

If business is going to pass on the tax to consumers – as they always have to do – are businesses supporting this plan to curry favor with Obama? Of course they are. But who are “they”?

Top Companies Behind Obama’s “Global Warming Tax”

General Electric – the folks who brought you the expensive “energy-saving” light-bulbs by government mandate also bought Enron’s windmill business, that being the company which originally hatched this scheme. Beyond windmills GE has redesigned its business lines to capitalize on the energy-scarcity agenda, with little luck to date but counting on a lobbying budget bigger than “big oil”, combined. And, just by the way, they’re the owners of MSNBC and one of the few American companies that still trades with our most dangerous enemy, Iran.

Utilities – Cap-and-trade creates what is essentially a carbon cartel, restricting the supply and raising the price of fossil energy and thereby creating windfalls for the lucky holders of emission credits. It is surely a coincidence that companies caught engaging in illegal market manipulation -- Enron, and electric utilities American Electric Power, Cinergy, Entergy, and Calpine -- have been among the most aggressive lobbyists for the Kyoto Protocol or kindred emission trading schemes.

Cinergy’s CEO James Rogers is a Ken Lay protégé who, after merging with and taking the reins of Duke Energy, has added even more muscle to the global warming lobby.

Wall Street -- Among the most influential lobbyists for Kyoto-style policy are Wall Street firms planning to make commissions on the purchase and sale of carbon credits. Again surely a coincidence, the players most heavily invested in profiting from a cap-and-trade scheme were among those mostly heavily implicated in last year’s collapse (e.g., Lehman Bros., JP Morgan Chase). The crumbling Bank of America, naturally, is also a leading cheerleader of the scheme.

These firms are the first cohort of what we will continue to identify for you as the companies lobbying for Congress to stick you with a “global warming” tax.

You are now faced with the question of whether to allow your elected representatives to approve one of the largest tax increases in history, raising $650 billion over eight years from mandating then selling “cap-n-trade” carbon dioxide ration coupons.

Under the Obama scheme, billions of dollars of those rationing coupons will be given away to companies supporting the scheme, and their “cost” nonetheless priced into your energy costs. This is precisely how it has worked in Europe, at great economic cost.

Yet all businesses are on the hook for their sheepishness in the face of this long-running, cynical ploy by businesses underwriting the campaign of environmentalist hysteria proclaiming the end of the earth. Some, like NEC Electronics America, have just announced with a sigh that, with California having just adopted a version of this scheme, it appears that their operations there will be pulled back to Japan.

There’s not enough room on that island nation to ship all of our jobs, though China, India, Mexico, South Korea and others have made clear they are waiting to accommodate the rest. The one thing we do know is that if this doesn’t prove politically to be BTU redux for the Democrats, there’s no room for manufacturing here.



Chris Horner is author of Red Hot Lies: How Global Warming Alarmists Use Threats, Fraud, and Deception to Keep You Misinformed.