FOR IMMEDIATE RELEASE:
September 29, 2009
Patrick Creighton 202.621.2947
Laura Henderson 202.621.2951
Main Street Under Cap-and-Trade Attack
Study confirms Waxman-Markey cap-and-trade redistributes wealth from lower, middle-class income earners to wealthiest, most politically-connected
WASHINGTON—As Senators Barbara Boxer (D-Calif.) and John Kerry (D-Mass.) are expected to release their version of a cap-and-trade global warming bill this week, the Institute for Energy Research (IER), a non-profit free market energy think tank, today released a new study that demonstrates the ways that cap-and-trade, as outlined in the House-passed Waxman-Markey bill, would benefit the nation’s wealthy and politically favored industries while placing a harmful burden on America’s struggling middle and lower income families.
Highlights of the study are below:
- The nation’s highest-earning households would profit by $604 per year on a net basis from the legislation, which amounts to the redistribution of approximately $14 billion per year from the lowest-earning 80 percent of households to the highest-earning 20 percent of families in the nation.
- Households in the lowest-earning quintile—those earning less than $18,370 per year—would pay $451 per year or a substantial 4.5 percent of their income. This additional tax upon these households would be larger than every other tax they currently pay, except the federal payroll tax, which costs an average of $656 per year.
- For America’s “middle class” households—those residing in the middle 20 percent of the income spectrum—the $805 annual Waxman-Markey energy tax is the equivalent to 1.5 percent of their income or roughly equivalent to an 80 percent increase in the state and local income taxes.
- The Waxman-Markey bill distributes roughly $778 billion in free emission allowances to various politically favored industries and others between 2012 and 2020, at the direct expense of non-favored industries and U.S. consumers.
- Contrary to recent CBO estimates that rely on a theoretically unsupported assumption about the economic impact of free allowances on U.S. households, this study finds that the lowest-earning 80 percent of families would bear the entire net burden of the Waxman- Markey bill while rent-seeking corporations and the wealthiest profit.
NOTE: This study analyzed ONLY the cap-and-trade portion of Waxman-Markey.