cap and trade Essay

975 WordsJul 2, 20104 Pages
Cap and trade, who pays the tax? A campaign promise by President Barrack Obama was, “if you make under $250,000, you will not see one penny higher in taxes.” Imagine paying a new tax that is over a thousand dollars per household. Not to mention the possible increase in other goods as a trickledown effect. Long talked about is the new energy emissions taxes know as “Cap and Trade.” There are plenty of rumors and questions regarding the bill, however there are few answers to what the taxes are and who will pay for the tax.   H.R. 2454 has been in the news for over a year and there are numerous rumors and hysteria over its implications if passed by the senate. What is fact and what is fiction when it comes to these rumors? Who will pay for this tax? Who benefits? So many questions exist when it comes to this controversial bill. President Obama promised no new taxes for those making under $250,000 per year. After reading this you will have a better understanding of who will pay for this tax. The bill sets a cap on emissions of greenhouse gases. By 2020, emissions must be reduced 17% over 2005 levels. By 2050, emissions must be reduced 80% or more. Staying under these caps is done with a system of permits or allowances. Companies must have an allowance for every ton of greenhouse gas they emit. They are allowed to buy and sell those allowances, but gradually the total number of allowances will be reduced, thus reducing overall emissions (Carey, 2009). Simply put, the bill pushes forth a yearly reduction in greenhouse gases. If a company requires more than their allotted emissions, they can either buy the credits from another company or pay a tax to the federal government. How expensive are these credits? The Congressional Budget Office did an analysis of what has come to be known as the Waxman-Markey bill. According to the CBO, the

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