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Oregon Spends $200,000 to Figure Out How to Impose a Carbon Tax


Posted by Paul Blair on Wednesday, December 18th, 2013, 5:31 PM PERMALINK


Following a “regional climate change agreement” with California and British Columbia, Oregon legislators have commissioned a taxpayer-funded $200,000 study to examine a new state carbon tax. The study aims not to examine the impact on consumer energy costs, but merely on how to implement it in Oregon.

A new cap-and-trade tax regime will do little to address concerns of legislative do-gooders who are worried about The Day After Tomorrow (or any other sort of apocalypse).

In fact, California Governor Jerry Brown said, “This is global. So, if it’s only Oregon, Washington, California, and British Columbia, nothing’s going to happen.”

He's right. As developing countries exponentially increase their emissions, there isn’t much a few states can down to lower overall global emissions. The clear impact of cap-and-trade, however, is an increase in the cost of electricity. Precise numbers are hard to acquire, given that most studies focus on how to implement the policies not on their economic impact. President Obama, however, in support of national cap-and-trade legislation admitted that utility rates would “necessarily skyrocket.”

Peter Orszag once noted that electricity “price increases are essential to the success of a cap-and-trade program.” Cap-and-trade is regressive and hits hardest poor and middle-income households who spend more of their paychecks on energy.

For Oregon taxpayers that could mean anything from several hundred extra dollars per year up to several thousand. The legislature, unfortunately, has expressed no interest in a cost-benefit analysis.

Supporters of the plan told an Oregon legislative committee that the tax revenue generated from the selling and trading of cap-and-trade credits could “replace portions of existing revenues” in the form of “corporate tax cuts, low-income tax relief, and targeted investments in certain industries.”

The predictive reality of such tax increases would be investing in "green" technology that is far more expensive than coal and if California is any indicator, an expansion of the welfare state.

From the Wall Street Journal:

California expects to generate $500 million this year from auctioning off permits to emit carbon, and between $2 billion and $14 billion annually by 2015. This rich new vein of revenues was supposed to flow to green programs (e.g., solar subsidies), but Governor Jerry Brown cut a deal with Democrats in the legislature to seize this year's proceeds to finance more generous welfare and Medicaid benefits.

When push comes to shove, Democrats are far more interested in using higher revenues from tax hike schemes on spending increases, not tax cuts. Oregon taxpayers should be wary of any promises about future tax cuts in exchange for cap-and-trade schemes that have been rejected at the national level. 

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