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Tuesday, July 07, 2009

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It's important to understand that the estimates thrown about that cap-and-trade will cost less than $0.50 a day are misleading. This cost estimated by the CBO ignores the amount taken in by the government. If electricity rates rise by 40% and gas goes up $0.75/gallon, that is not counted because the money is eventually taken in by the government and you will receive a service for the money you pay in. So even though you pay you will be receiving $3.5 billion for battery research in Ohio, or fuel-efficient car research in Michigan. This is like saying that your income taxes or property taxes don't count against the amount of money you have. It's a big assumption and should be pointed out whenever the "....for less than the cost of a postage stamp..." argument is used.

http://www.heritage.org/Research/energyandenvironment/wm2503.cfm

"CBO mistakenly assumes that the government spending and distribution of allowance revenue is the dollar-for-dollar equivalent to a direct cash rebate to energy consumers--that is, that the carbon tax is not a tax if the government spends the money, which is simply preposterous."

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