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The Great GOP $3,100 Energy Tax Lie

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Tuesday, March, 31st, 2009, 8:34 pm

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After attempts to label President Obama’s cap and trade proposal a sales tax on energy failed, Republican have shifted their attack to calling Obama’s plan a tax that will cost American families an additional $3,100 a year. The problem is that this is a lie.

Republicans have been claiming that, “The Administration raises revenue for increased spending through a series of new taxes, including a light switch tax that would cost every American household $3,128 a year. What effect will this have on Americans struggling to pay their mortgages?” Where did the GOP get this number from?

According to Polifact, the number came from a 2007 M.I.T. study. When the GOP uses the term light switch tax what they are really referring to is Obama’s cap and trade plan. What the GOP did to come up with their numbers was use a little warped math.

They used the cap and trade program in the M.I.T. report, not Obama’s, and divided the hypothetical revenue number from the report by the number of households in the country to come up with their $3,100 number. However, when Republicans asked John Reilly an economist and one of the authors of the report about the numbers, they were told that they were wrong, “Someone from the House Republicans had called me (March 20) and asked about this,” Reilly said. “I had explained why the estimate they had was probably incorrect and what they should do to correct it, but I think this wrong number was already floating around by that time.”

Reilly even told them why their calculations were wrong, “That’s just not how economists calculate the cost of a tax proposal. The tax might push the price of carbon-based fuels up a bit, but other results of a cap-and-trade program, such as increased conservation and more competition from other fuel sources, would put downward pressure on prices. Moreover, consumers would get some of the tax back from the government in some form.”

The motivation for the GOP is simple. They are looking for a way to oppose cap and trade without being opposed to combating global warming. Republicans consider this more government regulation on the private sector, and cap and trade would also violate the Republican ideology of never doing anything that would harm the corporate bottom line, but anti-climate change legislation has widespread support, so the GOP has to find a way to scare public support away from Obama’s proposal.

I first wrote about this on Saturday, when the GOP first starting floating the attack that Obama’s cap and trade was a sales tax on energy. The GOP is trying to pull a page out of the same playbook that they used to defeat President Clinton’s health care reform. If the GOP can’t find a good reason to oppose a bill, they try to scare people by claiming that the proposed program is too expensive, all the while hiding the real reason why they oppose the legislation. It is tactics like these, which turn people away from politics. The Republican Party is still trying to scare America, instead of lead it.

The Great GOP $3,100 Energy Tax Lie was written by Guest Contributor for PoliticusUSA.
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