We Keep Digging the Hole ... Deeper and Deeper.

"Cap and trade, in other words, is a scheme to redistribute income and wealth ... Hit hardest would be the "95% of working families" (from the article)

A tax is a tax, no matter what name you give it or even if you try to hide it. Who Pays for Cap and Trade? We the productive American people do ... with higher heating bills and gasoline prices as they pay yet another huge transfer payment. This will be paid by everyone because it will increase costs for energy and every product anyone buys. The US will be far less competitive as a result.

The question should be "Who benefits from Cap and Trade"?


http://online.wsj.com/article/SB123655590609066021.html

March 9, 2009 | WSJ Editorial Board

Who Pays for Cap and Trade? Hint: They were promised a tax cut during the Obama campaign.  

Cap and trade is the tax that dare not speak its name, and Democrats are hoping in particular that no one notices who would pay for their climate ambitions. With President Obama depending on vast new carbon revenues in his budget and Congress promising a bill by May, perhaps Americans would like to know the deeply unequal ways that climate costs would be distributed across regions and income groups.

[Review & Outlook] AP

Politicians love cap and trade because they can claim to be taxing "polluters," not workers. Hardly. Once the government creates a scarce new commodity -- in this case the right to emit carbon -- and then mandates that businesses buy it, the costs would inevitably be passed on to all consumers in the form of higher prices. Stating the obvious, Peter Orszag -- now Mr. Obama's budget director -- told Congress last year that "Those price increases are essential to the success of a cap-and-trade program."

Hit hardest would be the "95% of working families" Mr. Obama keeps mentioning, usually omitting that his no-new-taxes pledge comes with the caveat "unless you use energy." Putting a price on carbon is regressive by definition because poor and middle-income households spend more of their paychecks on things like gas to drive to work, groceries or home heating.

The Congressional Budget Office -- Mr. Orszag's former roost -- estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That's about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all five of them).

But the greatest inequities are geographic and would be imposed on the parts of the U.S. that rely most on manufacturing or fossil fuels -- particularly coal, which generates most power in the Midwest, Southern and Plains states. It's no coincidence that the liberals most invested in cap and trade -- Barbara Boxer, Henry Waxman, Ed Markey -- come from California or the Northeast.

Coal provides more than half of U.S. electricity, and 25 states get more than 50% of their electricity from conventional coal-fired generation. In Ohio, it totals 86%, according to the Energy Information Administration. Ratepayers in Indiana (94%), Missouri (85%), New Mexico (80%), Pennsylvania (56%), West Virginia (98%) and Wyoming (95%) are going to get soaked.

Another way to think about it is in terms of per capita greenhouse-gas emissions. California is the No. 2 carbon emitter in the country but also has a large economy and population. So the average Californian only had a carbon footprint of about 12 tons of CO2-equivalent in 2005, according to the World Resource Institute's Climate Analysis Indicators, which integrates all government data. The situation is very different in Wyoming and North Dakota -- paging Senators Mike Enzi and Kent Conrad -- where every person was responsible for 154 and 95 tons, respectively. See the nearby chart for cap and trade's biggest state winners and losers.

Democrats say they'll allow some of this ocean of new cap-and-trade revenue to trickle back down to the public. In his budget, Mr. Obama wants to recycle $525 billion through the "making work pay" tax credit that goes to many people who don't pay income taxes. But $400 for individuals and $800 for families still doesn't offset carbon's income raid, especially in states with higher carbon use.

All the more so because the Administration is lowballing its cap-and-trade tax estimates. Its stated goal is to reduce emissions 14% below 2005 levels by 2020, which assuming that four-fifths of emissions are covered (excluding agriculture, for instance), works out to about $13 or $14 per ton of CO2. When CBO scored a similar bill last year, it expected prices to start at $23 and rise to $44 by 2018. CBO also projected the total value of the allowances at $902 billion over the first decade, which is some $256 billion more than the Administration's estimate.

We asked the White House budget office for the assumptions behind its revenue estimates, but a spokesman said the Administration doesn't have a formal proposal and will work with Congress and "stakeholders" to shape one. We were also pointed to recent comments by Mr. Orszag that he was "sure there will be enough there to finance the things that we have identified" and maybe "additional money" too. In other words, Mr. Obama expects a much larger tax increase than even he is willing to admit.

Those "stakeholders" are going to need some very large bribes, starting with the regions that stand to lose the most. Led by Michigan's Debbie Stabenow, 15 Senate Democrats have already formed a "gang" demanding that "consumers and workers in all regions of the U.S. are protected from undue hardship." In practice, this would mean corporate welfare for carbon-heavy businesses.

And of course Congress is its own "stakeholder." An economy-wide tax under the cover of saving the environment is the best political moneymaker since the income tax. Obama officials are already telling the press, sotto voce, that climate revenues might fund universal health care and other new social spending. No doubt they would, and when they did Mr. Obama's cap-and-trade rebates would become even smaller.

Cap and trade, in other words, is a scheme to redistribute income and wealth -- but in a very curious way. It takes from the working class and gives to the affluent; takes from Miami, Ohio, and gives to Miami, Florida; and takes from an industrial America that is already struggling and gives to rich Silicon Valley and Wall Street "green tech" investors who know how to leverage the political class.

Josie06 Josie06
56-60, F
50 Responses Mar 9, 2009

That can be true on a consumption tax and it has many good points. But it also allows the spender to determine when Washington DC get their tax dollars and you get 100% of your paycheck.

I agree that a flat rate tax system would tax everyone at the same rate and even under a flat rate those who earn more would pay more tax just as your example showed. I don't think I am missing the picture.<br />
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My only thought was that under both systems, the flat rate system and the current progressive rate system, those who earn more will pay more and will contribute a higher percentage of the grand total.<br />
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The AGI numbers you posted before showed that under the current progressive rate system that the top 50% pay 97% of the grand total. I believe under a flat rate system the top 50% would still pay around 88% of the grand total.<br />
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I haven't read a whole lot about consumption taxes but some and they also have pros and cons. I think they would encourage people to be more frugle, to preserve resources and to save more of what they earn none of which is totally bad.

Then that still equates to today's system. Ranking the upper or lower is someones idea, not mine. What is an upper income? Over $50,000? $100,000? $250,000? Choose, as anythings fair game. We would most likely get differing levels from different people.<br />
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You are missing the picture. The flat tax gives them the same percentage or rate of tax.<br />
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You are attempting to calculate the percentage of the grand total of taxes being paid. Two totally different things.<br />
My guess is the higher incomes would still put more money into the government coffers that the lower incomes. <br />
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Maybe some where one of us will find a projection since the data has been reviewed by many. Such as Steve Forbes, **** Armey and a couple others promoting the flat income tax.

Josie, using your example Citizens A, B, and C are the lower 50%, citizens D, E and Joe Millinaire are the upper 50%.<br />
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At a flat rate of 2% the lower half earned 225,000 or 11.4% of the income and paid 4,500 or 11.4% of the taxes. The upper half earned 1,750,000 88.6% of the income and paid 35,000 or 88.6% of the taxes.<br />
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Under the current progressive system the upper half would still earn the 1,750,000 or 88.6% but would pay 97% of the taxes or 38,315 of the 39,500 paid.<br />
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The upper 50% is going to pay considerably more of the total taxes paid under either system because they earn considerably more of the total income.<br />
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No they will not pay a higher percentage under a flat tax system, they can't by definition everyone pays the same percentage.

If i remember right, in order to be revenue neutral (gov't getting the same amount of tax they do today) the percentage would need to be between 17-23% from everyone.<br />
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Check out the FairTax, it is not a flat income tax but rather a consumption tax. It is the best i've seen in regards to changing the current system. It is not perfect but it is the best i've come across.

outercalm, It has been referred to as a flat tax, on income. i'm unsure how you deduced the percentages in your example, but to me that is immaterial.<br />
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All i'm saying is that: <br />
Citizen A pays 2% on his $25,000/yr or $500 in tax.<br />
Citizen B pays 2% on his $50,000/ yr or $1,000 in tax.<br />
Citizen C pays 2% on his $150,000/ yr or $3,000 in tax.<br />
Citizen D pays 2% on his $250,000/ yr or $5,000 in tax.<br />
Citizen E pays 2% on his $500,000/ yr or $10,000 in tax.<br />
Joe Millionaire pays 2% on his $1,000,000 or $20,000 in tax.<br />
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A fairer tax system. And by the way there is no deductions or credits which would adjust you income down. <br />
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i don't know but under a flat tax i would still believe that the rich do pay a higher percentage of their income in taxes than would the working poor. Much the same as today. However, what i see is it would take the same bite out of everybody and that makes it fairer.<br />
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i also know it would limit the income of the government to spend. It would make no sense to argue who pays more cause we all pay the same (percentage) regardless of income. Provided we don't allow them to continually adjust the rate (percentage) higher.

I'm guessing by proportional you mean we would all regardless of income level pay the same percentage, 2% in your example. I usually see that refered to as a flat tax.<br />
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I could be way off in my understanding, feel free to correct me, but I think that would result in the following.<br />
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Under the progressive plan the upper half of us earn 88% of the income and pay 97% of the taxes.<br />
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Under a flat plan the upper half of us still earn 88% of the income but then and would pay 88% of the taxes.<br />
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Does that make sense?

It's the progressive income tax system we have ... the more you earn, the higher your tax rate. The top pays more and the bottom pays less. Even taking into consideration credits and allowances.<br />
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The top 1% pay 40% of the tax; <br />
the next 4% pay another 20% of the tax; <br />
the next 5% pay another 10% of the tax;<br />
the next 10% pay another 25% of the tax; <br />
and the next 25% pay 11% of the tax. <br />
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We have just worked our way down from the highest-range of income earned to the middle-range of income earners ... that top 50% then are paying 97% of all the taxes paid in the US. <br />
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It's the progressive way ... it comes to a point when it become regressive for some. Maybe we need a proportional tax (everyone pay the same proportion) without any credits and allowances. @% of you and 2% of me makes the same hit on each of us income and budgets.<br />
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The FairTax is the best model, though not perfect, that has come along in decades.

Those AGI numbers are pretty close to what I have seen reported other places.<br />
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From what I have read the top 50% earn roughly 88% of the income with the bottom 50 paying roughly 3% of the taxes on the remaining 12% of the income.

Really? So then 95% get what? A break, free stuff or money in return for 5% being hit harder in taxes. <br />
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No one has claimed, discussed or wanted to take money off from the people who didn't have it.<br />
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Tax cuts now (in this election in the US) have been included in tax credits for some. Credits that will phase out or apply to only certain people paying taxes.<br />
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Like this: A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple. (What happened to the $250,000 income limit on those being hit?)<br />
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Also, the last stimulus check i got from the government was includable as taxable income for 2008 and therefore tax was due on it (as income) on April 15th, 2009. Yes, the government did me and millions of Americans a favor sending them a stimulus check.<br />
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It's illusion and slight-of-hand. It's 'trickle-down economics' in the overall effect of what actions cause.<br />
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Plus we have credits would be "refundable," which is Washington-speak for the fact that you can receive a checks even if you have no income-tax liability. That is welfare an new entitlement. The IRS data for 2006 or 2007, i can not remember, reflected that approximately 35-38% of Americans have no tax liability or a negative liability (refunds).<br />
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The Heritage Foundation's Center for Data Analysis estimates that by 2011, under the this plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS.<br />
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Say for argument 35% pay no tax, that leave 60% (to get to the 95%) and an additional 5% (to get to 100%) that pay tax. Now we redistribute money from the 5% to the 95%. That isn't common sense, that's ridiculous.<br />
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~~~~~<br />
The top 5% already pay the most tax in the US, now we want them to pay more.<br />
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Percentiles Ranked by AGI - AGI Threshold on Percentiles - Percentage of Federal Personal Income Tax Paid<br />
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Top 1% - $388,806 - 39.89 <br />
Top 5% - $153,542 - 60.14<br />
Top 10% - $108,904 - 70.79<br />
Top 25% - $64,702 - 86.27<br />
Top 50% - $31,987 - 97.01<br />
Bottom 50% -

To answer the question posed by the article: <br />
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"Who benefits from Cap and Trade?"<br />
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The environment, and the companies in the industry being regulated, which is exactly what happened in the previous case of regulation to curb acid rain. I posted the results of that intervention earlier.

How is it inaccurate? Give specifics. Cite publications or other sources to show that inaccuracy you're claiming. What data or fact(s) are erroneous?

Benji ... some of us in the world still believe in individual responsibility and not total state responsibility, as you do.

As for http://www.nationalpriorities.org/costofwar_home, i found nothing to break it down between the WOT/Iraq?Afghanistan and all other DOD expenses passes by Congress. Without clarifying date not a concise source. i believe, seeing a graph on another page it is total expenses of the DOD for what ever reason. Not really a cost of the war itself.<br />
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Possibly see: The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11 ... October 15, 2008 at http://opencrs.com/document/Rl33110<br />
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Supplemental (H.R. 2642/P.L. 110-252) includes a total of about $160 billion for war costs for the Department of Defense (DOD) for the rest of FY2008 and part of FY2009. Funds are expected to last until June or July 2009 well into a new Administration. The Administration did not submit a request to cover all of FY2009.<br />
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Your $3 trillion figure is over a 10 year periods covering budgets from 9/11 2001 through possibly 2012 or in one article 2018 (as the present Administration has calculated expenditures).<br />
~~~~<br />
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http://money.cnn.com/2007/10/24/news/economy/cbo_testimony/index.htm<br />
'War on Terror' may cost $2.4 trillion<br />
Congressional Budget Office expects the funds would keep 75,000 troops fighting in Iraq and Afghanistan for the next 10 years.<br />
By Steve Hargreaves, CNNMoney.com staff writer<br />
October 24 2007: 4:41 PM EDT<br />
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NEW YORK (CNNMoney.com) -- The wars in Iraq, Afghanistan and anti terrorist efforts abroad could cost the country $2.4 trillion over the next ten years, according to a report Wednesday.<br />
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Under these CBO projections, funding for Iraq, Afghanistan and the GWOT could total about $1.3 trillion or about $1.7 trillion for FY2001-FY2018.<br />
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Different estimates (Rep vs Dem and Lib vs Conservative) per the war at $6-10 billion. Again no real specific on just WOT/Afghanistan/Iraq or total DOD spending.<br />
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See for some Congressional testimony by Deputy Defense Secretary England at http://www.alertnet.org/thenews/newsdesk/N18181226.htm.<br />
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Most of the reported data appears to be a gross total for all DOD spending regardless of line item (war vs salaries, vs material vs medical, etc)<br />
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Withdrawing all troops, whether a wise move or not and i think not, would not give our budget any relief ... with deficit spending and non-essential padding the budget.<br />
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The 'STIMULUS' is larger than any total cost of the "war" to date (real or projected). Cost of stimulus now pegged between $3-4 trillion, with over $300 billion on interest to the national debt alone..<br />
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And i will not argue there were better uses for the money. As their is for billions and trillions in foreign aid to Hamas and other countries around the globe. Plus the monies we pay the UN could be better utilized within the US.

"Emergency supplementals" do make sense... if you are trying to make your budget look closer to being balanced for political reasons. <br><br />
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Is the current cost of Iraq $600 Billion like it says here?:<br><br />
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http://www.nationalpriorities.org/costofwar_home<br><br />
<br><br />
Or is it $3 Trillion as reported here:<br><br />
<br><br />
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/07/AR2008030702846.html<br><br />
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Well if it's 3 trillion then that represents quite a "drop in the bucket"

And Obama is increasing the size of the bureaucracy even more. <br />
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Why just the War in Iraq. For all the money we send overseas in foreign aid we could have solved problems in the USA. But do not forget the military budget is just a drop in the bucket for what we spend in Entitlements. <br />
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If we cancel all monies to the military for war or salaries, a military budget of $0.00 ... we could not pay for all the entitlements. And entitlements and then healthcare will be more costly. We still will not have sufficient revenue to pay for it. Thus, more national debt.<br />
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i just ask for some well thought out reasoning ... i see and hear a lot of emotion on everyone's part.<br />
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The collateral damage, the way i read your statement, is all America's fault. Everything these days seems to be America's fault or Bush's fault. Words i truly am tired of hearing. This defeatist attitude has been the mantra of many in this country since Viet Nam and does lead to appeasement and failure. <br />
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Those with a defeatist attitude are consumed with negativity about this country and it is a very prevalent attitude today.<br />
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(http://en.wikipedia.org/wiki/United_States_federal_budget,_2007)<br />
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The President's actual budget for 2007 totals $2.8 trillion. Percentages in parentheses indicate percentage change compared to 2006. This budget request is broken down by the following expenditures:<br />
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* $586.1 billion (+7.0%) - Social Security<br />
* $548.8 billion (+9.0%) - Defense[2]<br />
* $394.5 billion (+12.4%) - Medicare<br />
* $294.0 billion (+2.0%) - Unemployment and welfare<br />
* $276.4 billion (+2.9%) - Medicaid and other health related<br />
* $243.7 billion (+13.4%) - Interest on debt<br />
* $89.9 billion (+1.3%) - Education and training<br />
* $76.9 billion (+8.1%) - Transportation<br />
* $72.6 billion (+5.8%) - Veterans' benefits<br />
* $43.5 billion (+9.2%) - Administration of justice<br />
* $33.1 billion (+5.7%) - Natural resources and environment<br />
* $32.5 billion (+15.4%) - Foreign affairs<br />
* $27.0 billion (+3.7%) - Agriculture<br />
* $26.8 billion (+28.7%) - Community and regional development<br />
* $25.0 billion (+4.0%) - Science and technology<br />
* $20.5 billion (+0.8%) - Energy<br />
* $20.1 billion (+11.4%) - General government<br />
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$1,551 billion is the total Entitlements (SS, Medicare, Unemployment, Medicaid) - way out strips anything else in the budget. Entitlement. Do we add healthcare as a new entitlement?<br />
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The cost of the war was high, to me that's why supplemental budgets made sense. It reflected the cost of defense in the budget and the cost of war in the supplemental. And the supplemental also included costs for Katrina and other disaster for which the military was called in.<br />
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Receipts for fiscal year 2007 were $2.4 trillion. FY2007 on-budget receipts were $1.7 trillion. FY2007 off-budget receipts were $608 billion. Off-budget receipts include Social Security and Medicare payroll taxes, as well as the net profit or loss of the U.S. Postal Service.<br />
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* $1.1 trillion - Individual income tax (43.9%)<br />
* $869.6 billion - Social Security and other payroll taxes (34.7%)<br />
* $370.2 billion - Corporate income tax (14.8%)<br />
* $65.1 billion - Excise taxes (2.6%)<br />
* $26.0 billion - Customs duties (1%)<br />
* $26.0 billion - Estate and gift taxes (1%)<br />
* $47.2 billion - Other (1.9%)<br />
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Source: preliminary FY2007 year-end estimate from the U.S. Treasury Dept.<br />
<br />
The IRS estimated that there were about $345 billion in uncollected taxes, which is sometimes referred to as the "tax gap.".[1]

I wasn't telling you that choosing your articles are wrong because it's from a conservative publication. I was merely showing you how what you present to bolster your argument can be rebutted by showing you an article to bolster my argument and we're arguing the same thing from different sides. Geez, it's nothing to get insulted about. <br />
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The haves have a problem because they want it all and for the have nots to have nothing. It's greed, pure and simple, The haves want more and to get it, they have to take it from the have nots. That's how I see it. The little guy cannot get ahead, the opportunity is not there.<br />
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For you to say that Obama is growing the government is unbelievable. We had the biggest government expansion with Bush since FDR, AND the biggest raise in government spending since Johnson. Read the FACTS from the Washington Times! Oh, is that a conservative publication?<br />
I think it is! For all the trillions we spent in our illegal war in Iraq, we could have fixed alot of things here at home, not to mention saving over 4200 innocent American lives and the 75k wounded and severely injured Americans as a result of Bush's folly. Oh and let's not forget the Iraqi human life we call "collateral damage." We're talking about our children's and grandchildrens legacy here. Where's the outrage about all of that? You're right. They are inheriting a vastly different world than we know. Pollution, wars, deficits, you name it, they own it, thanks to us. We need to do all we can to fix it as best we can for them. We owe them that much.

When in history did we become a depressing socialist state that we can point to? What history and what outcome are you talking about?<br />
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We can have a valid debate about changing the rules on charitable giving. There are reasons for and against doing that, and honestly I'm not sure how I feel about it. <br />
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What I am sure of is that Obama is doing what he thinks is best for the country and the economy as a whole, after much deliberative thought, and that it's very tiresome to read criticisms of his policies turn into claims that he doesn't care about freedom or people, only government. <br />
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As for Bush vs Obama, I could go on for days about how Obama has already shown that he is in an entirely different class than Bush as far as leadership goes. I have read Obama's books, I have followed his campaign closely for the last few years, I have not just heard his speeches, I have listened. He is thoughtful, he is curious, and he approaches issues methodically. He embraces science, he doesn't shun it. He acknowledges that government cannot do everything for everyone, but that it can do much for many, and that total government control of everything is just as bad for the economy as a free market with an absent government (what got us into this mess). <br />
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For SS, you are right for pointing out that SS is only taxed up to a certain income (about 100,000 if I recall correctly, but it's been a while since I looked that up) and I do support removing that restriction.

The problem i see is that many people are not looking to the effect of their actions. Also that they appear to be following blindly as lemmings do.<br />
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To be told that an article is wrong because it's from a conservative publication and then be shown an article from a left leaning publication ... does not restore my hope in people.<br />
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The US tax system is regressive, despite it's being called progressive. Yest any change of it that is discussed is poo-pooed unless we remake it in the same vein it is.<br />
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People talk loudly about earmarks in budgets but when the latest is passed they are fine with it. People talk badly of heir representative ... and then keep sending them back.<br />
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It is very disheartening to see this country say now that words do not have meaning and we must change 8 years of catastrophe from the last President ... who was derided from day one and continues to be even though he is gone. <br />
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A big part of me is sadden in that words do have meaning and have had meaning for decades and centuries. But now we are told those meaning are the same and not what i mean. Sorry, if i were to do that in my work, change accepted meaning, i would be fired.<br />
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SS is a problem and only a portion of your income is taxed. Don't blame the haves for not paying enough when they are legally only required to pay on. That being 'x' amount of income (rather than all of it). It's not their fault ... change the law.<br />
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The fight between the haves and have nots' is brought down to basically greed. Capitalism built this country ... but now we want to destroy it. <br />
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Our children and grandchildren will inherit a much different country. The current President does not believe in freedom, he believes in government. Soon there will be more government employees than those in the private sector, to handle all the new programs which will be instituted. Entrepreneurship will be decimated ... in the name of government solving the ills of society. Charities will be smaller as government is changing the taking of those deductions too (in the stimulus/budget bill passed).<br />
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i pray i am wrong ... but history teaches me different. The course can be seen, if one want to look. Just because someone new does it does not change the outcome.

Josie, Your words are not falling on deaf ears, we just see different sides of the issue. What's right to you is wrong to me, it doesn't mean either of us is wrong. I just want my point of view heard too.<br />
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I just think that so many taxes and SS contributions and things are regressive towards the poor and middle class. We pay more taxes in proportion to our income than the rich (who seem to constantly complain about taxes which are a necessary evil). We pay more in SS contributions than rich people. And who does the most complaining? The haves, not the have nots!

So Tax Foundation is conservative. Salon magazine is and has been slightly yo the left on issues but it is a viable choice then.<br />
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Statutory vs effective is a good argument. As is adding the States impact on business. It increase the rate, whichever one you want to look at. Taxes are levied by multiple sovereignty in the US and it is legal to do so.<br />
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As far as Dell, i believe i said it was wages and not taxes. If i didn't i apologize here and now.<br />
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Many things make up the business climate ... that is what i am trying to get across. <br />
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Someones has bought into the kool-aid and will never look at anything factual until they are bit in the *ss by the blinders they wear.<br />
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Talk about what ever you want as my words fall on deaf ears ... those who do not want to hear my voice in the wilderness. When times shows it's fullness i pray no one is up in arms if they should become disillusioned.

It's all about who you feel sorry for. <br><br />
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Liberals have bleeding hearts for the weakest among us, those that aren't able to flourish. The people that are often hit by tragedy and circumstance, but which the conservatives dismiss in order to focus on an anomaly: the evil freeloader. <br><br />
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Conservatives on the other hand have bleeding hearts for corporations and the wealthy, who have to pay those poopy progressive taxes and estate taxes that place such a burden on them. Such a burden that they continue to threaten to take their toys and leave the country.<br />
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If you believe that trickle down economics actually works, then you will only care about taxes on the rich. I enjoyed the article that Jojo posted, since it does mention how tiresome the republican mantra of "lower taxes" gets. Up until recently, it used to be paired with "remove regulations" but of course we're now eating the bitter fruits of deregulation, so they've dropped that talking point. <br />
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John McCain, Mr. Maverick himself, used to fight for deregulation in every other sentence. Cut taxes, deregulate. That is why he was hurt so badly when the economy tanked. His standard economic policy that he's endorsed for decades was at the root of our misery.

Looks like "V" has the right idea too about statutory vs effective tax rates. Yea! "V"!

Josie posts links to all conservative articles, of course they are skewed toward the argument.<br><br />
Here's some from the other side of the argument. <br><br />
<br><br />
http://www.cbpp.org/10-27-08tax.htm<br><br />
PUTTING U.S. CORPORATE TAXES IN PERSPECTIVE<br><br />
<br><br />
http://www.salon.com/tech/htww/2009/02/03/bogus_tax_rate_talking_point/index.html<br><br />
<br />
<br><br />
The bogus corporate tax rate talking point<br><br />
<br><br />
Watching a serious economist tackle Rush Limbaugh's Wall Street Journal opinion piece from last Thursday, "My Bipartisan Stimulus," is oddly disorienting. The University of Wisconsin's Menzie Chinn lives in a world where facts and attention to detail really matter; Limbaugh doesn't. He requires special handling.<br><br />
<br><br />
But Chinn does get right to the point in his headline: "Budget Surplus? Tax Cut! Budget Deficit? Tax Cut! High Energy Prices? Tax Cut! Deep Recession? More Tax Cuts!" And in the course of his blog post, he provides the useful service of pointing to source material that exposes a favorite Republican talking point -- the notion that U.S. corporations pay higher taxes than corporations in the rest of the world.<br><br />
<br><br />
Republicans are remarkably disciplined on this issue. Regardless of the topic, if you wait long enough, the corporate tax complaint will surface. Last Friday, when I appeared on Warren Olney's "To The Point," economist Peter Ferrara robotically reiterated the mantra: the 35 percent corporate tax rate is supposedly among the highest of all industrial nations. I knew at the time that the assertion had been widely questioned, but I didn't know what authority to cite, so I let it go.<br><br />
<br><br />
Menzie Chinn to the rescue. This morning, he points to another post of his from two years ago, referencing the Congressional Budget Office report, "Corporate Income Tax Rates: International Comparisons." The CBO report found that in some cases the effective tax rate on American corporations was lower than comparable rich countries, and in most cases roughly similar.<br />
<br />
Rush Limbaugh, of course, will never stop repeating his talking points, nor, apparently, will Republican politicians, no matter how many elections they lose. For the rest of us, however, it's nice to know that when they make their aggrieved assertions about the poor, pitiful, oppressed-by-government American corporation, we can say, not so fast, and point to a document.<br />
<br />
Read the CBO report here:<br><br />
http://www.cbo.gov/ftpdocs/69xx/doc6902/11-28-CorporateTax.pdf<br><br />
<br><br />
Josie, When Dell et el send their call centers to India, it's not because of higher taxes they pay, it's because they can get away with paying those people **** for wages as compared to what they have to pay real Americans. They don't have to pay for some junk healthcare policy. It has nothing to do with taxes.<br><br />
<br />
The argument to me is for profit Corporations do not want to pay their fair share of taxes and the middle class Americans have to pay to make up what they don't pay. The statutory tax rate and the effective tax rate with their many write offs are two different things. Corporate welfare also runs rampant in the US. It's more about tax evasion from paying their fair share than it is doing the right, patriotic thing and paying what is right.

Yes, the effective tax rate for IRS ... the you add the State tax rates on top of that. Taxes hurt American business, they have moved offshore ... not because they wanted too. But rather because they find a more favorable business climate.<br />
<br />
<br />
http://www.taxfoundation.org/publications/printer/22917.html<br />
March 18, 2008<br />
U.S. States Lead the World in High Corporate Taxes<br />
<br />
by Scott A. Hodge<br />
<br />
Fiscal Fact No. 119<br />
<br />
America's political leadership is finally waking up to the fact that the tax rates businesses face in the U.S. are way out of step with our major economic competitors. Last year, for example, Ways and Means Chairman Charles Rangel proposed cutting the federal corporate tax rate from 35 percent to 30.5 percent. While a 5 percentage point cut in the federal corporate tax rate may sound significant, it may not be sufficient to meaningfully improve the competitiveness of the United States.<br />
<br />
Currently, the average combined federal and state corporate tax rate in the U.S. is 39.3 percent, second among OECD countries to Japan's combined rate of 39.5 percent.1 Lowering the federal rate to 30.5 percent would only lower the U.S.'s ranking to fifth highest among industrialized countries.<br />
<br />
More recently, other members of Congress—including Sen. John McCain and Congressman Eric Cantor—have released proposals to cut the corporate rate even deeper to 25 percent. While this lower rate would improve the U.S.'s international ranking and competitiveness, that improvement would be mitigated by the high corporate tax rates imposed by many states.<br />
<br />
Many states impose state corporate income taxes at rates above the national average of 6.6 percent. Iowa, for example, imposes the highest corporate tax rate of 12 percent, followed by Pennsylvania's 9.99 percent rate and Minnesota's 9.8 percent rate. When added to the federal rate, these states tax their businesses at rates far in excess of all other OECD countries.<br />
<br />
When compared to other OECD countries:<br />
<br />
* 24 U.S. states have a combined corporate tax rate higher than top-ranked Japan.<br />
* 32 states have a combined corporate tax rate higher than third-ranked Germany.<br />
* 46 states have a combined corporate tax rate higher than fourth-ranked Canada.<br />
* All 50 states have a combined corporate tax rate higher than fifth-ranked France.

statutory tax rates vs. effective tax rates:<br />
<br />
http://mediamatters.org/items/200902030003

i would agree, however that is the way the system is designed. The rates are there as well as credits, etc. Even with the best accountants the IRS will have it's due.

Josie, <br />
<br />
Thanks for the links. <br />
<br />
If a company actually pays the rates in those articles they need to hire a better tax accountant.

According to all i've read the US has the highest or second highest effective tax rate on corporations.<br />
<br />
bigfatfinanceblog.com/2009/02/26/us-corporate-taxes-the-highest-in-the-world/ <br />
<br />
www.americanthinker.com/2009/03/us_companies_pay_the_highest_t.html<br />
<br />
online.wsj.com/article/SB121875570585042551.html?mod=opinion_main_review_and_outlooks<br />
<br />
www.heritage.org/research/tradeandeconomicfreedom/wm2065.cfm<br />
<br />
All i know is that federal corporate taxes inflict their toll. <br />
<br />
i have a similar health policy. i pay my premiums (my portion is higher than the companies) and the first 1k per year for each member in household, then an 80/20% ratio takes over. Lovely deal signed by employer.

"Corporations are tax at the highest rate in the industrialized world here in the US."<br />
<br />
The true effective rate after all the deductions and write offs is much, much, much lower.<br />
<br />
My employer health plan is a joke, huge premiums and very high deductible. Basically the insurance company doesn't pay a dime until after the first 20K or so in expenses. It is a very large expense for both the company and the individuals really only guards us against the major medical costs. We pay for the rest.

In the long run the consumer is always hurt. Always.<br />
<br />
You can't continue to tax, or add fees or impose a Cap & Trade system and not expect it to reach the consumer in an increase in the cost of goods and services sold.<br />
<br />
The company does get hurt if they can not recoup costs of doing business. It reduces profits and therefore dividends to shareholders ... the owners of the company. To keep the revenue per share high they will pass the costs through to consumers.

hmmm, well I went back and 'skimmed' some more. This is what I found in post #10 on this thread:<br><br />
<br><br />
Josie said:<br><br />
<br><br />
"As we have witnessed with the high tax rates in this country .. they move overseas to a more favorable business climate. America loses jobs.<br><br />
<br><br />
A business always does they pass the cost of doing business, including all ta levies, on to their customers in higher prices."<br><br />
<br><br />
If a business just passes along the higher tax costs, then aren't you saying that increasing corporate taxes won't hurt the company it will only hurt the consumer after the company passes along the expense? <br />
<br />
Sounds an awful lot like what my last post claimed you said... am I misquoting you?

The employer should be out of the healthcare picture and still provide it (or a portion of it) in their benefit plans. Not be one of the driving forces behind what an employee can have. Business tailor make health care policies to their will and therefore all companies are different in what they offer.<br />
<br />
i never said they corporate taxes don't exist. You can really paraphrase and miss the entire point of any ones words ... except your own of course.<br />
<br />
Many employers have left or moved significant portions of their business overseas. This is a historical fact. Call Dell or another Help Line ... you get India. Lost jobs to Americans.<br />
<br />
Corporations are tax at the highest rate in the industrialized world here in the US. Do you think they "eat" the taxes and reduce the profit to their shareholders? Simply put ... NO!<br />
<br />
VendettA12, please quite obfuscating when trying to tell me what i said. Evidently you are not listening or reading, merely skimming key words here and there.

The biggest tax on employers is healthcare, but that's a tax you're in favor of. All other taxes = bad bad bad. If it's all about seeking a better environment then why wouldn't all American companies have already left, since other countries have better tax rates AND they don't have to contribute towards healthcare? (unless they're in Japan)<br />
<br />
Why complain about US corporate tax rates... and then go on to say that corporate taxes don't exist because they just pass the cost onto the consumers? It cannot be both ways.

True. <br><br />
<br><br />
Business have to do both, maintain profit and market share, you are right. <br><br />
<br><br />
What happens when the expense of being in business is more than their maintaining profit and market share? They can only eat the costs for so long ... then the red in begins to appear in the books.<br><br />
<br><br />
If the cost can not be recouped to stay in the 'BLACK', do business continue to operate? NO. They move to a better environment or go away completely shutting their doors. Either way the doors are closed and jobs are lost.<br><br />
<br><br />
The government loses a source of revenue and the employees are on the unemployment line. We can't have it both ways, keeping them solvent and taxing them more and more and more .<br>

Josie<br />
<br />
" ... And they can't just pass on these costs, ..." --- Hogwash. If they don't, they don't survive in business with 'RED" in the books.<br />
<br />
That is exactly my point. I can only pass on so much before lost sales results in going out of business. Businesses have to do both, maintain profit and market share.

" ... And they can't just pass on these costs, ..." --- Hogwash. If they don't, they don't survive in business with 'RED" in the books.<br />
<br />
So then when high-tax California can't stop companies from moving to low-tax Nevada ... you're saying it can't happen on a national scale?<br />
<br />
If capitalism is so bad, why then bring up competition and competitiveness. <br />
<br />
Business passes all costs along. In the US and overseas. For business taxes are overhead that is built into their product or service. They will get what the market will bear, and consumers will buy their products. <br />
<br />
It can and does happen.<br />
<br />
~~~~~~~<br />
http://news.tnanytime.org/energy/node/1881<br />
U.S. solar panel makers prefer overseas<br />
<br />
* News Archives<br />
<br />
CNN Money<br />
By Steve Hargreaves<br />
Published: January 16, 2009<br />
<br />
When SunPower, one of the country's largest makers of solar panels, went looking to build a factory a few years back, several countries vied for their business. Ultimately, the company was attracted to a place that offered a competitive workforce and favorable taxes - and 5,000 high-skilled manufacturing jobs ended up in the Philippines.<br />
<br />
"We would love to have the opportunity to invest in our own backyard," said Julie Blunden, a spokeswoman for the San Jose, Calif.-based company. But "the tax packages offered in the Philippines are difficult to compete with in the U.S. today."<br />
<br />
It's not just taxes that entice companies to build abroad - lower wages and, in some cases, a better trained workforce help too. But taxes are a key part.<br />
<br />
Now, as lawmakers scramble to pass a stimulus package designed to revive the economy and wean the nation from fossil fuels, more people are calling for a special tax break in the U.S. for manufacturers of renewable energy products.<br />
<br />
Leading the charge are a handful of Senate Democrats keen to see these manufacturing tax credits make it into the stimulus bill.<br />
<br />
The renewable energy industry already gets tax breaks - but they are targeted at producers of the power - the utilities and other companies that operate the wind farms in the Midwest or the solar arrays in the Arizona desert.<br />
<br />
The new tax credits would be for manufacturers - the companies that build the solar panels, wind turbines, or equipment used in geothermal energy production.<br />
<br />
Details of how manufacturing tax credits would work vary, but it would generally involve letting these companies take 30% of what they invested in equipment in a given year off their total tax bill.<br />
<br />
Numbers on how much this tax break would cost or how many jobs it would create are also hard to come by.<br />
<br />
The Solar Energy Industries Association estimates it could create 315,000 jobs by 2011, and that's just in the solar industry alone. The wind industry might double that number, with geothermal and biomass adding even more jobs.<br />
<br />
While tax breaks for the renewable industry as a whole - expected to total around $25 billion as of last tally - have wide bipartisan support in Congress,it's not expected that the manufacturing tax credit will make it in this time around.<br />
<br />
They were not included in the first draft of a House bill unveiled Thursday.<br />
<br />
Proponents of tax incentives for green energy manufacturers say it's too bad these haven't yet been included.<br />
<br />
"If we're serious about job growth, and we're serious about renewable energy, then why not establish some sort of federal incentive that would drive the two," said Michael Carboy, a renewable energy analyst at Signal Hill, a boutique investment firm based in Baltimore.<br />
<br />
Many have argued that the U.S. has long lost out on opportunities to lead in the clean energy field.<br />
<br />
Attracted by better subsidies in not only Asian countries but places like Spain, Denmark and Germany, renewable energy firms - many of which originated in the U.S. - have been setting up shop overseas.<br />
<br />
In addition to the lost manufacturing jobs, this country also loses the specialized engineering knowledge that comes with a robust renewable energy industry.<br />
<br />
Moreover, it loses its basic manufacturing know-how - the companies and employees that make the gear grinders, metal cutters and other equipment that form the backbone of an industrial economy.<br />
<br />
"What are we doing to our own competitive posture?" asked Carboy. "We are being reckless by continuing to outsource technologies we need to build our industrial base in the U.S."<br />
<br />
But others say targeting a specific industry for favorable treatment is a bad idea.<br />
<br />
Robert Murphy, an economist at the free-market think tank Institute for Energy Research, sees nothing wrong with more domestic manufacturing or a lower tax rate.<br />
<br />
But to single out renewables, he says, sets the government down the dangerous path of picking what will be the best technologies.<br />
<br />
"They are micromanaging and cloaking it in tax relief," he said. "They are giving an advantage to solar over the other energy sources that pass the market test."<br />
<br />
Others argue that the other energy sources - like fossil fuels - are only cheaper because they don't price into account their negative effects, namely pollution.<br />
<br />
They also say the government has a long history of supporting emerging industries.The construction of the Interstate Highway System helped the auto industry, while the Internet, which originated in the Defense Department was a boon to the personal computing industry.<br />
<br />
"At the beginning of a nascent market, do you want to decide to engage in the early evolution of that industry or no?" asked SunPower's Blunden. "This is that time."<br />
<br />
~~~~~~~~~~~~~~~~<br />
<br />
U.S. manufacturers produced $1.5 trillion worth of goods in 2005, up 70 percent from $900 billion in 1992, according to Edward Gresser of the left-leaning Progressive Policy Institute.<br />
<br />
Right now, the U.S. suffers from one of the highest corporate tax rates in the world. While the European Union has been cutting business taxes — the average for EU countries is now only 27 percent — the U.S. is stuck with a 40 percent corporate income-tax rate. Booming Ireland boasts a corporate rate of only 10 percent. Even France’s rate comes in lower than the U.S. rate.<br />
<br />
(http://article.nationalreview.com/?q=YWE1ZWUyMDE3ZmFlMzY4ZmY5MDcyOTUzNDY2YjY2MDU=)<br />
<br />
Excessive taxes and tax rates are a impetus for business to seek better environment. Look at the jobs that have gone overseas already ... lower tax rates and less worker costs.

I agree, "V." Also, you can plant all the trees you want, in order for that to work, you have to stop cutting down the billions of trees that are being cut by Mead and Bush's "Clear Trees" initiative. We need to do a better job of recycling paper so we don't have to cut down as many trees. They only grow so fast as a renewable resource. When you look at big corporations like Monsanto, heavens forbid they cut back on a dividend to their investors instead of passing the buck to the consumer.

This debate is about implementing a cap and trade on energy producing companies, not on a chain store like Wal Mart. These businesses aren't going to just leave the country. Are they going to take all of our resources with them on the way out? <br />
<br />
The cap and trade to reduce acid rain was successful, despite the fact that these same arguments were presented back then. The arguments are just as wrong now. <br />
<br />
This will work, as long as there is competition. If another company can produce energy cheaper and with less pollution, they will prevail. There is now competition for making your corporation 'greener' and that is good for everyone. And they can't just pass on these costs, for that will make them less competitive and people won't buy their product.

Who pays for all these trees we are going to plant? <br />
<br />
Businesses can't always pass it on. You cannot always raise prices, you have to remain competative in the market.

i don't know what the answer is. i know business must do better, but to tax them into submission will have ill effects.<br />
<br />
As we have witnessed with the high tax rates in this country .. they move overseas to a more favorable business climate. America loses jobs.<br />
<br />
A business always does they pass the cost of doing business, including all ta levies, on to their customers in higher prices.<br />
<br />
As grits said we could plant more trees. Maybe a better more thought out tax credit for investment in the pollution control equipment. State governments have done this with some success.

plant more trees and other plants

SO, what do you think the answer is? We have to do something to protect the air we breathe?

Laudable goal. But it is a tax which will be passed on to consumers as a cost of doing business. Much like the BTU Tax proposed by former President Clinton years ago, that would increase the costs to the consumer.<br />
<br />
Even the 10% allocated to consumers as an offset will cover the entire cost for them. Additionally we have seen that the credits given to us by the federal government com back to bite us in the *ss ... as they are classified as income and then taxable. <br />
<br />
A poor way to mandate business be accountable.<br />
<br />
<br />
(http://www.usnews.com/blogs/capital-commerce/2009/3/3/what-obamas-cap-and-trade-plan-will-cost-you.html)<br />
<br />
What Obama's Cap-And-Trade Plan Will Cost You<br />
<br />
March 03, 2009 08:07 AM ET | James Pethokoukis <br />
<br />
A study from the George C. Marshall Institute tries to quantify the costs of a cap-and-trade plan to reduce carbon emissions. They're not small, to say the least: And although this study uses 2008 as a baseline, the Obama plan would hit in 2012 and could come in combo with a hike in investment and incomes taxes for wealthier Americans and the creation of a special healthcare tax:<br />
<br />
The authors find that the constraints posed by the Lieberman-Warner cap-and-trade approach is equivalent to a constant (in percentage terms) consumption decrease of about 1% each year, continuing to 2050. Put another way, the cap-and-trade approach is the equivalent of a permanent tax increase for the average American household, which was estimated to be $1,100 in 2008, would rise to $1,437 by 2015, to $1,979 in 2030, and $2,979 in 2050.<br />
<br />
Reviewing a host of recent studies, Buckley and Mityakov show that estimates of job losses attributable to cap-and-trade range in the hundreds of thousands. The price for energy paid by the American consumer also will rise. The studies reviewed showed electricity prices jumping 5-15% by 2015, natural gas prices up 12-50% by 2015, and gasoline prices up 9-145% by 2015. As an illustration, gasoline would suffer a 16 cent price increase per gallon at the low end of the estimates to a $2.58 penalty at the high end (using the January 2009 reported retail price of $1.78 per gallon).<br />
<br />
<br />
What the government gives you with the right hand that take away with the left. Slight of hand. <br />
<br />
Most opine it will cost jobs, there is that nasty unemployment specter again. It, like other taxes we have seen, would cause business to think about moving to a better climate for taxes. As i said a laudable goal, however not the best way to effect it.

Cap and Trade 101<br />
What Is Cap and Trade, and How Can We Implement It Successfully?<br />
<br />
http://www.americanprogress.org/issues/2008/01/capandtrade101.html<br />
<br />
What is Cap and Trade?<br />
<br />
The goal: To steadily reduce carbon dioxide and other greenhouse gas emissions economy-wide in a cost-effective manner.<br />
<br />
The cap: Each large-scale emitter, or company, will have a limit on the amount of greenhouse gas that it can emit. The firm must have an “emissions permit” for every ton of carbon dioxide it releases into the atmosphere. These permits set an enforceable limit, or cap, on the amount of greenhouse gas pollution that the company is allowed to emit. Over time, the limits become stricter, allowing less and less pollution, until the ultimate reduction goal is met. This is similar to the cap and trade program enacted by the Clean Air Act of 1990, which reduced the sulfur emissions that cause acid rain, and it met the goals at a much lower cost than industry or government predicted.<br />
<br />
The trade: It will be relatively cheaper or easier for some companies to reduce their emissions below their required limit than others. These more efficient companies, who emit less than their allowance, can sell their extra permits to companies that are not able to make reductions as easily. This creates a system that guarantees a set level of overall reductions, while rewarding the most efficient companies and ensuring that the cap can be met at the lowest possible cost to the economy.<br />
<br />
The profits: If the federal government auctions the emissions permits to the companies required to reduce their emissions, it would create a large and dependable revenue stream. These financial resources could be used to achieve critical public policy ob<x>jectives related to climate change mitigation and economic development. The federal government can also choose to “grandfather” allowances to the polluting firms by handing them out free based on historic or projected emissions. This would give the most benefits to those companies with higher baseline emissions that have historically done the least to reduce their pollution.<br />
What Would a Successful Cap-and-Trade Program Look Like?<br />
<br />
The goal: To limit the rise in global temperature to approximately 2.0 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels by 2050 by reducing carbon dioxide and other emissions from companies as part of a larger plan for curbing global warming.<br />
<br />
The cap: To achieve this goal, the U.S. government should steadily tighten the cap until emissions are reduced to 80 percent below 1990 levels by 2050. Businesses would have to obtain permits entitling them to emit a certain quantity of carbon dioxide or its equivalent in other greenhouse gases. All permits would be auctioned off by the government. Emissions permits in the near term would likely fall in the range of $10 to $15 per metric ton of carbon dioxide or its equivalent.<br />
<br />
The trade: Companies unable to meet their emissions quotas could purchase allowances from other companies that have acquired more permits than they need to account for their emissions. The cost of buying and selling these credits would be determined by the marketplace, which over time would reduce the cost of trading the credits as trading becomes more widespread and efficient.<br />
<br />
The profits: Initial estimates by the Congressional Budget Office project that an economy-wide cap-and-trade program would generate at least $50 billion per year, but could reach up to $300 billion. Approximately 10 percent of this revenue should be allocated to help offset costs to businesses and shareholders of affected industries. Of the remaining revenue, approximately half should be devoted to help offset any energy price increases for low- and middle-income Americans that may occur as a result of the transition to more efficient energy sources. The other half of the remaining revenue should be used to invest in renewable energy, efficiency, low-carbon transportation technologies, green-collar job training, and the transition to a low-carbon economy. Some resources should also be invested in the energy, environment, and infrastructure sectors in developing nations to alleviate energy poverty with low-carbon energy systems and help these nations adapt to the inevitable effects of global warming. Revenues from the permit auction would essentially be “recycled” back into the economy to facilitate the transition to an efficient, low-carbon energy economy and ensure that consumers are not unduly burdened by potentially higher energy costs.

You must not understand taxation or business.<br />
<br />
As the article says ... Cap and trade, in other words, is a scheme to redistribute income and wealth.

You must not have read the article.

What incentive? <br />
<br />
To do better in the pollution? No. They are mandated to do better and stop polluting and that comes at a cost. A cost of doing business. That cost must be paid by someone and since the law doesn't they can't pass it along ... <br />
<br />
The incentive is to pass the cost on to their consumers and customers.

The last line of the article: <br />
<br />
"...it gives all emitters incentives to innovate to find the least-cost solutions for total pollution control"

Cap and trade provides an incentive for businesses to come up with innovative ways to reduce their pollution. Yet most of the people who oppose cap and trade claim to be big on innovation. It seems innovation is good, except when it comes to innovating ways to pollute less. <br />
<br />
The same sort of system was put in place years ago to combat acid rain, which was quickly becoming a problem. We instituted a cap and trade policy on SO2 and businesses were provided with an additional way to make money by not polluting. This is a win-win. <br />
<br />
See here:<br />
<br />
http://www.edf.org/page.cfm?tagID=1085