"Conservatives Falsely Assert That Green Economy Legislation Would Impose $3,100 Tax On Families"
Conservatives in Congress are resting their objections to effective green economy legislation on a bogus stat. Conservative leaders like Rep. John Boehner (R-OH) and Sen. Mitch McConnell (R-KY) are attacking the cap-and-trade proposal before Congress by claiming that it would “cost every American family up to $3,100 per year in higher energy prices.”
This is a deliberate lie.
They seem to be getting this number from an intentional misinterpretation of a 2007 study performed by a group of researchers at the MIT.
In an interview with PolitiFact, John Reilly, an MIT professor and one of the authors of the study, explained about this $3,100 claim:
“It’s just wrong. It’s wrong in so many ways it’s hard to begin.”” [...]
“Someone from the House Republicans had called me (March 20) and asked about this,” Reilly said. “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.”
House Republicans apparently took the total revenues from the hypothetical cap and trade system that MIT analyzed and crudely divided it by the number of households in America, getting approximately $3,100 per family.
What they don’t mention, however, is that not only did John Reilly explicitly tell them that this was an inappropriate way to do this calculation, but that MIT had determined the net welfare effect on a typical family and the burden would be less than 1/40th what they claim, and wouldn’t occur until 2015.
As PolitiFact explains: “The report did include an estimate of the net cost to individuals, called the “welfare” cost. It would be $30.89 per person in 2015, or $79 per family if you use the same average household size the Republicans used of 2.56 people.” In exchange, we’d get a clean & renewable energy economy, decreased reliance on oil, and a safer climate for the world.
The reason Boehner’s methodology is totally inappropriate?
“That’s just not how economists calculate the cost of a tax proposal, Reilly said. The tax might push the price of carbon-based fuels up a bit, but other results of a cap-and-trade program, such as increased conservation and more competition from other fuel sources, would put downward pressure on prices. Moreover, consumers would get some of the tax back from the government in some form. [In this case,President Obama wants to use revenues from cap-and-trade to fund a tax cut for 95% of working families]“
When conservatives tell you you’d see your energy bills go up $3,100 every year, it’s not distortion or spin, it’s just a lie.
Cross-posted at ThinkProgress.