Biggest Tax in US History?

According to this Wall Street Journal opinion piece, the cap-and-trade carbon emission restriction system being pushed through Congress now by Democrats will be the single biggest tax in US history. The Congressional Budget Office estimated that the bill -- commonly called the Waxman-Markey bill -- would cost only $175 a year by 2020, yet openly acknowledged that this estimate did not even attempt to estimate the broader economic effects of such a massive regulation-and-taxation system. Similarly, the CBO used unrealistic tax estimates, ignoring the way in which the program is designed to ratchet up taxes and decrease carbon emission caps over time.

More comprehensive analysis by the Heritage Foundation found that the bill would have an enormous effect on economic growth, costing $1,870 for a family of four in 2020 and up to $6,800 for a family of four in 2035. In addition, the program -- which is in reality a severe tax on all energy consumption and therefore all economic activity -- is expected to dramatically slow economic growth. Many industrial sectors will be hard hit by the massive new tax, as they are forced to increase prices, decrease production, and most probably lay off some of their workers. As the economy slows under the weight of this massive new taxation system, gas and electricity prices will rise dramatically even as unemployment rises.

Jim Lindgren at The Volokh Conspiracy points out that even with these horrible effects on the economy, the decrease in carbon emissions due to the program will fail utterly to make a difference in the big picture of global warming. Lindgren compares the bill to the disastrous Smoot-Hawley bill of 1930, which imposed large tariffs and is widely recognized to have made the Great Depression much worse. In fact, as Lindgren points out, the bill will act much like an internal tariff, and will likely have even more serious effects than the Smoot-Hawley bill. With the economy still suffering, the last thing Americans need is an expensive, harmful, and ineffective federal program that sabotages the economy for the sake of environmental posturing.