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  • The $4300 Energy Tax

    There have been a lot of numbers floating around measuring the costs of cap and trade. For instance, a study by MIT professor John Reilly shows a carbon cap and trade would cost the average American household $3,900 a year. $800 of that figure comes from, according to Reilly, “the cost to the economy [that] involves all those actions people have to take to reduce their use of fossil fuels or find ways to use them without releasing [Green House Gases].”

    Our analysis shows it will cost the average family closer to $4,300 per year. Here’s how:

    Our $1,500 number is just the direct impact of household energy bills. Your electricity bill. Your natural gas bill. Your home heating oil bill. And of course, the amount of gas you use in your tank.  The increased cost of your direct energy use is $1500 per year.

    But the direct tax on household energy use is just the beginning. The energy tax also hits producers. As the higher production costs ripple through the economy the household pocketbooks get hit again and again. When all the tax impacts have been added up, the average per-family-of-four costs rise by $4,300 per year.  In the year 2035 alone the cost is $8,276.  And the costs per family for the whole energy tax aggregated from 2012 to 2035 is $116,680.  And this doesn’t even include the impact of the 844,000 lost jobs.

    But just about everything we produce uses energy. As energy prices increase, those costs will be passed onto the consumer and reflected in the higher prices we pay for products. Higher energy prices also result in a slower economy which means less production, higher unemployment and reduced income. Families will suffer directly and indirectly from a higher energy tax.

    As President Obama warned us on his campaign trail, electricity prices will “necessarily skyrocket.” So will everything else, except for our income and standard of living.

    Senior Policy Analyst in Energy Economics and Climate Change David Kreutzer co-authored this post.

    Posted in Energy [slideshow_deploy]

    20 Responses to The $4300 Energy Tax

    1. Mike, Elko, NV says:

      It will be worse than that. Has anyone noticed that the environmentalists are starting to complain about habitat loss caused by, so called, green projects? This will drive up the costs further because of a shortage of energy as one would expect from government meddling.

    2. ccf says:

      Very well written synopsis of what these ludicrous taxes and regulations will cost the average taxpayer. The problem is that the elitist that are promoting this legislation will not be the ones losing their jobs.

    3. Barb -mn says:

      Mr. President,

      Before raising costs to Americans, show the world you mean business! Stop products of imports that use electricity. Better yet, stop all imports as the transportation adds to government claimed man-made global warming… otherwise you are nothing but a hypocrite.

    4. Barb -mn says:

      Mr. President,

      Before raising costs to Americans, show the world you mean business! Stop products of imports that use electricity. Better yet, stop all imports as the transportation adds to government claimed man-made global warming… otherwise, you are nothing but a hypocrite, guilting others in the process.

    5. Dennis, Idaho says:

      CCF If we change our voting habits the elitist will loose their jobs and maybe we can elect some Patriots with some common sense that will turn back to the heart of our Founding Father.

    6. John Roane Sarasota says:

      One way to reduce releasing excessive Green House Gases in the US would be to send 20 million illegal aliens (or whatever they are being called today) back to Mexico or whence they came.

    7. Dennis, Idaho says:

      If this TAXMAN/MALARKY bill is passed we all are in the poor house. It will accomplish nothing except to give Fed. Government more POWER AND CONTROL.

    8. tim - nicholson pa says:

      we the people need to impeach obama, along with all the demonrats in the house and senate

    9. PresMill-CA says:

      All states need to assert their states rights and thus will become imune to federal regulation. It's time for the Feds to get their noses out of our business. Encourage your state government to assert their states rights once again as the constitution provides.

    10. Rich, Whistler, BC says:

      The top 20 Democrats in Congress have served an average of 36.5 yrs in Federal office (not counting state office). 18 of the 20 are lawyers. Only one has any business experience. These career politicians don't have a clue, nor do they care. This is not about climate change, it is about money and power.

    11. Betty Hanicke, Kansa says:

      We desperately need term limits!

    12. Moose says:

      You must believe in made-made global warming first in order to justify these changes. I wonder how eager people will believe in Al Gore's claims when they feel it in their pocketbooks. By then it will be too late. The UK and Spain have already gone down this road, why don't we look at their results before we make the same mistakes.

    13. Rob, Westfir, Oregon says:

      Rich is correct, as all all the others. This is an attempt to absolutely financially "rape" the taxpayer in this country. The science is BOGUS. Climates change, always have always will. And climates changed dramatically way before modern man. We must ask our esteamed representatives this; Why are the Ice Caps on Mars shrinking? Could it be those damned Martians are ruining their planet as we are? Is it not a fact that the Oceans create 93% of co2 on Earth? If that is true than what real effect does man play in all of this? Scientist such as Mr. Christy, Dr.Drapela and Dr. Lindzen and many of their sensible coleages are who Congress should listen to before shoving this ruiness tax down our throats. It is nothing but a HUGE TAX that will enable our Government to grow even larger. (Social Engineering)As well as the wallets of Pope Gore and friends. It will be the "death blow" to the American Dream.

    14. Ray Bean, Alabama says:

      Our children and grand kids don't stand a chance. Own a house – don't even think of it with all the costs they are inheriting. Maybe they can live in "free Govt." houses in our new socialist society to be.

    15. Eugene Hoffman, Hous says:

      The Government Media Complex's propaganda campaign must be uncovered; somehow we must gain national air time with a creative program that simply tells the truth and does true investigative reporting. The scientific community has been bought off: using grant, reasearch and endowement money as the carrot, and telling lies about global warming as the stick: they should be ashamed. Human beings cannot control the climate; it is just that simple.

    16. Ray Bean, Alabama says:

      Al Gore has gotten filthy rich off his bull. Check out his jet and cost of energy for his little bitty home!!!!!

      C'mom Al stop spitting out this garbage and tell the truth.

    17. Bryce says:

      The $1500 in direct costs are passed on to consumers, because the government took in revenue from CO2 intensive industries, correct? And most of that money will go back into consumers pockets, through direct rebates or lowering other taxes. So won't that money also "ripple through the economy, hitting consumer's pockets again and again?

      In the end, it should mostly balance out. The money taken from energy companies will go back into the economy, either directly, through lowered taxes, or after being spent on research into alternative energies. Once the scales are balanced, there's very little change other than stronger incentives for energy efficiency.

      It's positively brilliant. So of course Heritage would be against it.

    18. Jason, Alabama says:

      Wow. You guys are way off. The "estimate" of $3,900 did not originate from any MIT study. That was the result of very fuzzy math done by Republicans in Congress. This letter by Dr. Reilly from MIT explains how Republicans misrepresented his study, and what the correct number should be ($65):


      I don't mind you guys being against taking action on climate change, but at least base your opposition on facts. For instance, take Rob's confusion on the shrinking of Martian ice caps on May 18. While he doesn't say so, he was clearly implying that the Sun is causing Mars to warm. The FACT is that these changes on Mars are due to changes in its orbit and tilt, much like our planet's Milankovitch cycles. There has not been an increase in solar energy that would be significant enough to account for any substantial increase in temperatures on Mars.

      There is a lot of misinformation out there. Please search for opposing arguments so that you can properly weigh them, and objectively determine the truth. Search out the facts. Talk to climate scientists, even skeptical ones, such as Lindzen, Spencer, or Christy. At least you will be more informed in your opposition, rather than spouting pseudo-scientific arguments.


    19. Geno St Louis says:

      It has now become US against THEM! All of them. Republicans helped pass this in the house. RE-Elect NO-One! We must do this every election until they understand WE are serious. Unfortunately I now have no faith in the American people. Is Michael Jackson still dead? Whats going on with that? Anyone know?

    20. Omega Tennessee says:

      Geno, you are right. If we don't stop showing up to vote for the same idiots every election things are not going to change. I agree I have no faith in the American people anymore…they don't care.

      They are more interested in Michael Jackson. Who Cares?

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