March 17th, 2009 5:06 PM Eastern
By Phil Kerpen
I’ve already explained here on the Forum how the cap-and-trade energy tax works, and would be the biggest tax increase in the history of the country. Now, amazingly, the White House is telling something closer to the truth about this tax hike, admitting that the official budget estimate of $646 billion over 8 years—already a mighty steep price to pay—is far, far lower than the real cost.
The deputy director of the White House National Economic Council, Jason Furman, is giving us a glimpse at the real number, telling Senate staff the energy tax scheme would actually raise “two-to-three times” the budget’s official $646 billion revenue estimate. Dow Jones reports that 5 people at the meeting confirmed the statement—we can be pretty sure he said it.
It make sense, because the budget estimate was only half the official score from the Congressional Budget Office for last year’s Lieberman-Warner bill, even though the Obama version is designed to have much steeper costs because it requires steeper emissions cuts.
If Furman is right that the real tax hike would be two or three times the official budget estimate—and it’s likely still a lowball—that would mean the actual tax hike would run well into the trillions, roughly between $1.3 trillion and $1.9 trillion between fiscal years 2012 and 2019 by Furman’s own estimate.
The White House claims that this massive gusher of new tax revenue would be dedicated to tax relief, but judging by the budget that’s just a PR gimmick. More than 42 percent of the “tax cuts” in the Obama budget—according to its own official estimates—go to people who don’t pay taxes. Call it a handout; call it a welfare check; call it social spending; don’t call it a tax cut, though, because it means the burden of the federal government on people who actually work, save, invest, and build wealth will be higher than ever before.
Remember that these staggering costs of $1.3 to $1.9 trillion are for just the first 8 years of a 40 year program that gets much more expensive over time. This would be the final knock-out blow for a wobbly U.S. economy, and we can only hope that as people learn the facts they’ll oppose it strongly enough to force Congress and the White House back to the drawing board.
Kerpen is policy director for Americans for Prosperity.