Double Trouble for Taxpayers

Posted August 12, 2009 at 12:02pm

The veneer is finally stripped off President Barack Obama’s campaign promise of only raising taxes on the top income-earners in America. Administration officials are publicly admitting that some kind of middle class tax increase is on the table in order to pay for a government-run health care program and to cover long-term efforts to reduce the enormous deficit. [IMGCAP(1)]With national unemployment tipping the scale at nearly 10 percent, experts are now referring to our present economy as the “Great Recession.— At a time when our nation’s leaders are desperately trying to find a way out of this quagmire, why would Congress consider a bill that would not only impose a national energy tax on every household and small business in the country, but also further restrict our domestic energy production?That’s exactly what will happen if an assorted alliance of environmentalists, left-leaning politicians and union workers are successful in ramming the “cap and trade— bill through the Senate. Similar to the bill that very narrowly passed the House, the Senate’s plan would effectively implement a national energy tax by limiting carbon emissions on an industry-by-industry basis and forcing firms that exceed their government-determined allotments to purchase costly credits to maintain compliance with the law. Proponents have repeatedly admitted that cap-and-trade will raise fossil fuel prices so as to discourage consumption. When he was director of the Congressional Budget Office, current White House Budget Director Peter Orszag stated: “Under a cap-and-trade program, firms would not ultimately bear most of the costs of the allowances but instead would pass them along to their customers in the form of higher prices.—It’s maddening to think that our lawmakers would impose costly tax increases in the midst of a recession. According to an analysis by the nonpartisan Charles River Associates, cap-and-trade will cost most American households $2,100 per year. In addition, the bill imposes limits on domestic businesses that will further hamper their ability to operate in an increasingly competitive global market.The underlying presumption in Washington these days is that the federal government should “manage— the economy by taxing energy production and consumption to encourage a transition to something “greener.— However, this creed is against the grain of our free-market, capitalist society, a foundation that most Americans still prefer. A Rasmussen poll last month revealed that 71 percent of voters believe job creation is more important than tackling climate change, while 67 percent admit they are not willing to pay higher taxes and utility costs to generate alternative energy that will supposedly fight global warming. Congress and the Obama administration are proving just how out of touch they are with mainstream Americans through the health care debacle as well. The president touts “freedom,— “competition,— and “choice— in his health care package, but recent surveys show that Americans know better.According to a separate Rasmussen poll last month, 78 percent of voters believe that health care reform will bring higher taxes for the middle class. Their uneasiness is justified. According to an analysis by the National Taxpayers Union Foundation, the words “choice,— “options,— and “freedom— appear just 85 times in the House’s mammoth, 1,018-page health care reform legislation, while three restrictive words — “require,— “limit,— and “must— (and variations) — were nine times more prevalent. It’s also rather prophetic, considering the recent admission from key analysts. CBO Director Doug Elmendorf recently rebuffed arguments that a government-run health care program would reduce costs. He stated unequivocally that the proposed health care reform “significantly expands the federal responsibility for health care costs.— It will be interesting to see if the CBO bows to political pressure and revises ObamaCare cost estimates downward as it did for cap-and-trade. Such a move would placate some, but would ultimately come crashing into fiscal reality.As the Senate considers the largest federal tax increase in American history — and an intrusion of a wasteful bureaucracy into the U.S. health care system — let’s hope our responsible stewards will reject the administration’s prescription of more taxes, higher energy costs and restricted health care. That would be a “change— many voters would applaud, whether or not they believed in candidate Barack Obama’s campaign slogan. Andrew Moylan is director of government affairs for the National Taxpayers Union.