Thursday, April 2

the Light Switch Tax

House Republicans are now making a claim that President Obama wants to pay for health care by charging a brutal light switch tax that will crush the average tax payer.

An excerpt from the house Republican Statement:

"The administration raises revenue for nationalized health care through a series of new taxes, including a light switch tax that would cost every American household $3,128 a year,"

Let’s read that one again.

"The administration raises revenue for nationalized health care through a series of new taxes, including a light switch tax that would cost every American household $3,128 a year,"

This alleged "light switch tax" is a reference to Obama's proposal to tax power companies for carbon dioxide emissions and allow companies to trade emissions credits among themselves. That's called a cap-and-trade program, and Republicans say the companies would just pass the tax on to electricity consumers.

To give there claim a little more bite, they site a report based on a similar Cap and Trade proposal would raise $366 billion a year. The report couldn’t be based on the Obama Administration proposal because it hasn’t been publicly detailed yet.

The report was put together by M.I.T. and can be viewed here if you like.

What House Republican’s did is make an assumption based on basic math and the idea that the cost of the “similar” Cap and Trade program would be passed on to consumers, or in this case to tax payers.

The “similar” Cap and Trade program would cost $366 billion dollars per year.
There are 114 million households in America. (I don’t know about you but I am not an economist. Even though I am not an economist, I suspect there are a few other items that need to be factored in here.)

If you divide the cost by the number of households you come up with $3,128.205 (you can’t forget the half cent if you want to make a real impact here)

To the House Republican’s credit on March 20th they took there assumption and determination made by use of basic math and contacted one of the reports authors at M.I.T., John Reilly, to make sure that the assumption they were making was correct.

It turns out that the House Republican assumption wasn’t correct. Mr. Reilly even told them why the assumptions they were making were not correct.

According to the Light Switch article at Mr. Reilly stated in an interview, “It’s wrong in so many ways it hard to begin.” Mr. Reilly went on to add “I had explained why the estimate they had was probably incorrect and what they should do to correct it, but I think this wrong number was already floating around by that time.”

OK, we know the program will end up costing us, the consumers something in the long run, but exactly how much it will cost will not be known until the actual Cap and Trade program becomes public knowledge.

The “similar” program did detail how much that program would boil down to per household and per person. According to that report in 2015 the net cost to individuals would be $30.89 per person. If you were to use the 2.56 average household size that the House Republican’s used, you would be looking at $79.078 of additional cost per household per year. That is just a little bit different than the House Republican’s estimate of $3,128.20

I don’t know folks, what do you think?
Should this one get a nomination for the Weekly WTF?!

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