The proposed bill, co-sponsored with Joe Lieberman, mandates an energy-rationing scheme that all economists acknowledge is equivalent to a broad-based energy tax which is similar to Bill Clinton’s 1993 Btu tax proposal. Energy would be taxed through the back door by placing a cap on the amount of carbon dioxide (CO2) that energy-producing companies can emit. It puts a legal limit on the amount of energy that can be drawn from conventional sources such as oil, coal, and natural gas.
McCain’s energy tax would kick in whenever an energy-producing company wants to expand its output above the cap. If, for example, a utility company that is bumping up against its emissions cap wants to increase its production of electricity generated from coal, oil, or natural gas, it will have to buy permission to do so by purchasing unused permits from other companies. The same would be true of an oil refiner that wants to increase its output of gasoline or home heating oil, possibly to meet new consumer demand. The purchase price of the permits is a tax, and will have the same effects as a tax on the market; it would raise the price of the energy source, i.e. coal, oil, etc., and therefore, it would likewise raise the costs of all production that relies on those sources, as well as the price of all goods and services that those production processes generate.
The EPA has estimated what the McCain energy tax would mean to consumers. Since the bill’s provisions are phased in, the full cost of the tax would not be felt for a number of years. But in a letter to Senator McCain dated July 2007, the EPA estimated that the tax will be about $.26 cents in current dollars per gallon of gasoline by 2030 and $.68 cents per gallon by 2050. For electricity, the EPA estimates that the McCain energy tax would increase individual’s electric bills by 22 percent in 2030 and 25 percent in 2050.
Environmental Defense today enthusiastically welcomed the introduction of a strengthened Lieberman-McCain Climate Stewardship and Innovation Act with an important new co-sponsor.
“Joe Lieberman and John McCain have been working on global warming for a long time and this year’s bill has been significantly strengthened. It’s aggressive in the short term and responsible over the long term. Lieberman and McCain are following the science and they deserve a lot of credit for it,” said Environmental Defense President Fred Krupp.
The legislation is co-sponsored by Senators Olympia Snowe and Barack Obama, who supported the bill in the 109th Congress, and Senator Blanche Lincoln, who is a new co-sponsor. “The addition of Blanche Lincoln demonstrates the incredible momentum behind this issue. Moderates like Lincoln understand how important this is not only for the environment, but for America’s energy security, rural economy, and global economic competitiveness.”
The McCain-Lieberman proposal demonstrates that in politics, perception is reality and facts are negotiable.
Having jumped over facts that don’t support their assumptions, McCain and Lieberman combine two flawed policies–the Clinton BTU tax and the Kyoto Protocol–to produce an equally flawed legislative proposal.
Since emissions come from energy use, imposing a cap on emissions means imposing a cap on energy use. Cutting through all of the rhetoric, this is imposed scarcity–in World War II it was called rationing–and the result will be an increase in the cost of energy. A government-mandated increase in the cost of energy is a tax.
The summer collapse of Senator McCain’s campaign allowed it to escape the sort of scrutiny that Giuliani and Romney and to a lesser extent Thompson endured. (Mike Huckabee has also been given a pass until very recently.)
Now as voters in Michigan, Nevada and South Carolina consider their votes, they need to recall not just McCain’s votes against the Bush tax cuts, the McCain-Kennedy immigration “reform” with its Z Visas, the Gang of 14 which has left a long line of vacancies on crucial circuit courts of appeals and of course the already partially nullified McCain-Feingold restraints on free speech, they must also keep in mind that the Arizona maverick is teamed up with Barack Obama among others to cripple the economy in the name of global warming.