Do You Trust the Government to Take Your Money and Give it All Back to You? (Part 4 in a 10-Part Series)

Nicolas Loris / May 07, 2009

The reason cap-and-trade and carbon tax have been used interchangeably in the global warming debate is because they are essentially the same thing: a massive tax on energy. Although a more direct approach would be to tax carbon dioxide, it does not make it any more acceptable. But this tax is different because the revenue generated will be given back to the people, presumably.

When has that happened? Can we honestly believe every dollar extracted from Americans from a cap-and-trade or a carbon tax will be given back in the form of a rebate or a tax cut? Obama’s intention in his budget proposal was to recycle the money back to the people. Under the EPA’s section of the budget, about $80 billion per year in energy tax revenues will be dispersed as a tax cut to low- and middle-income workers and used for renewable technology investment, beginning in 2012, if cap-and-trade becomes law. But the Congressional Budget Office estimates that the tax revenues from cap and trade could be much higher – as much as $300 billion per year by 2020. Of course, if the government uses money to invest in green technology, it certainly takes away from the pie that can be redistributed back to the people.
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