• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Cap and Trade: A $3.6 Trillion Gas Tax

    Here in Washington, people are discussing two things: Jim Zorn’s job security as the Washington Redskins’ head coach and health care, in that order. But there’s a $3.6 trillion gas tax on the table that already passed the House and is making its way through the Senate, and cap and trade has Americans all over the country concerned. The $3.6 trillion gas tax figure, which includes gasoline and diesel gas, comes from a new report from Senators Kay Bailey Hutchison (R-TX) and Kit Bond (R-MO) on the effects of climate change legislation. And the energy tax has rippling economic effects, as Senators Hutchison and Bond explain in their Washington Times op-ed:

    Americans will be double-hit by the gas tax when it raises the costs of goods and services such as groceries and utilities they must continue to purchase. Energy costs are among businesses’ top operational expenses already. While companies face a variety of energy expenses, ranging from heating and cooling their work space to powering equipment and lighting, operating their vehicles is the most costly. Every company, from the small-town local florist to a package delivery service with nationwide operations, will be hard hit. In order for these businesses to withstand the heavier tax burden and to remain profitable, they will be forced to pass these energy cost increases along to consumers through higher prices.”

    Some industries are more energy-intensive than others, and  farmers and ranchers are hit particularly hard. Heritage Senior Policy Analyst Ben Lieberman writes, “In addition to higher diesel fuel and electricity costs, prices for natural gas-derived fertilizers and other chemicals will also rise. Everything else affecting agriculture, from the cost of constructing farm buildings to the price of tractors and other farm equipment, will also go up.”

    According to the Hutchison-Bond report, U.S. farmers and ranchers will incur higher fuel costs of $550 million in 2020. That figure will jump to $1.65 billion by 2050. According to The Heritage Foundation’s cap and trade analysis, farm profits are expected to decline by 28 percent in 2012 and will be an average 57 percent lower from 2012-2035. Congress is attempting to buy the farm vote by touting them as the beneficiaries of a carbon offset program because farmers can use cleaner technology, reduce nitrous oxide emissions, or simply not grow crops. However, the revenue gained from offset revenue will pale in comparison to lost income from cap and trade.

    Economic gains and environmental improvements aren’t mutually exclusive goals; in fact, they often go hand-in-hand. Hutchison and Bond say, “We can improve the environment and economy through American ingenuity and technological advancement, not with taxes and mandates that increase costs and burden American families and businesses.”

    Instead, cap and trade significantly reduces the amount of resources the private sector can invest in newer, cleaner technology.

    The full report is available here.

    Posted in Energy [slideshow_deploy]

    9 Responses to Cap and Trade: A $3.6 Trillion Gas Tax

    1. mike milwaukee says:

      the democrats will screw this country up so bad we will never recover

    2. tennessee says:

      If this cap and trade goes thru, china will be buying canadas oil and we will be holding the empty bag again.These enviromentalist have got the world in believing the sky is falling.If anyone believes the earth is warming up, and our fresh water is depleted and the ice capps are melting,I have some ocean front property in death valley to sell for $1.00 a achre.

    3. Todd, Iraq says:

      Well of course another tax after another. These "Dumbocrats" will ruin this country once and for all. America wake up for "Change" in 2010/2012 or it will be to late. America we're all in for many years of up hill battles that Americans for generations will never win if we don't get out back in front now or have we all lost our will.

    4. Bill, CO says:

      Telling farmers to simply not grow crops. There's a fine idea . . . Do people really believe these things when they say them? Cap and trade amounts to an outrageous tax that will deeply impact every American. We must fight it. Write your Congressmen at http://tiny.cc/pxIgi.

    5. Bill, GA says:

      What can we expect from an administration that has us declining to third-world status. They wont be the ones affected, they have there's. Elitist one and all.

    6. Butch Holman - Jacks says:

      Ben,

      I sure am glad that you and Heritage follow this. I do as well. People are getting sidetracked by this Administration, and everything they are trying to throw at us at once, not to mention all of the distractions, also. I keep on stressing, like you that we must not forget about this, or let this pass. We are Doomed if we do. Thanks Ben.

      Sincerely, Butch

    7. Pingback: Ironic Surrealism v3.0 » Cap and Trade: A Regressive Tax that will Hit the Poorest the Hardest

    8. Bobbie Jay says:

      All part of the plan that must stop! These deliberate acts to crush, crumble and collapse must stop!

    9. Pingback: Rebellion News

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×