Cap & Trade Legislation Summary – A Common Sense Explanation

There has been much talk and many articles written since Cap & Trade was introduced in Congress. As many have said before, I feel it is more fair to call this the Cap & Tax Plan. Is this something that we, as Americans, should be concerned? If you pay utility bills (electric, gas, etc.), you should be.

To keep this as simple as possible, Cap & Tax is designed to deal with Climate Change / Global Warming. Each Company in America will be given a CAP, which is the amount of Carbon one is allowed to output during their production, mainly producing electricity. If you exceed the Cap, you will have to pay a fine or purchase additional credits from Companies that do not Exceed their Cap for carbon emission.

If you live in one of the following states, primarily those that produce electricity using Coal, then the list below shows companies located in these States that will be penalized (Taxed) the most under Cap & Tax:

These twenty (20) States are in the HIGH Vulnerability due to their use of coal. In simple terms, this is a redistribution of wealth plot to Tax States that are above the Cap and reward those States that are below the Cap. These States will be at a disadvantage to other states and will pass on the higher costs to consumers. If you are forced to pay higher utilities due to Cap & Tax, how can this not be an increase in your taxes?

The answer is you are not paying higher income taxes due to Cap & Tax, but due to the Companies that are forced to pay for their carbon emissions, then pass the cost onto consumers, the ending result is the equivalent of a Tax. However, higher utility bills due to Cap & Tax is not a tax, just higher utility bills.

What I fear the most is the twenty states listed above will see their industry relocate to Countries that do not impose a Tax on your Carbon Output. I want to make clear that I do support taking care of our environment, but not by a Government Based Program. In addition, the United States has reduced the amount of Carbon Emissions by 8.3% since 2005, without any Cap & Tax Program.

I fear this will put us at a further disadvantage to other countries such as China and Mexico, which do not enforce such programs. In addition, we already have the EPA that regulates companies that operate in the United States.

If you are concerned about the implications of this proposed legislation, please contact your Representatives and Senators to let them know of your opposition. If you have any questions or would like additional information on this issue, please let me know.