The National Republican Congressional Committee sent out a press release yesterday which cited an MIT study that said U.S. Cap-and-Trade Proposals would lead to an increase of more than $3,000 a year in taxes.
That’s a complete lie says Politifact, a “nonpartisan watchdog group”:
According to PolitiFact, the NRCC used an MIT report analysing a similar cap-and-trade bill last year. The MIT report said the bill, under certain assumptions, could raise $366 billion per year. The NRCC divided this by 117 million households in the U.S. to get to $3,128 But, according to John Reilly, an MIT economist and one of the authors of the report, the interpretation that what is raised under a cap policy can be equated to cost per household is “just wrong. It’s wrong in so many ways it’s hard to begin…”
And, courtesy of Think Progress, here is a letter [pdf] Reilly just sent to House Republican Minority Leader John Boehner urging the NRCC to stop misrepresenting the MIT report.
Of course, Republicans desperately want to paint this issue as a tax to the American public and distort reality. It’s a political game and one they think they can win. The fact is Obama wants to pass along the revenue from cap and trade to consumers as a tax cut. He also wants to use it to fund other programs.
In the current early version of the cap and trade legislation, though, it is still not clear where the revenue would go. It simply says, “To be supplied.”
UPDATE: This is now being disputed by The Weekly Standard, with Reilly, changing his numbers once again:
During a lengthy email exchange last week with THE WEEKLY STANDARD, MIT professor John Reilly admitted that his original estimate of cap and trade’s cost was inaccurate. The annual cost would be “$800 per household”, he wrote. “I made a boneheaded mistake in an excel spread sheet. I have sent a new letter to Republicans correcting my error (and to others).”
While $800 is significantly more than Reilly’s original estimate of $215 (not to mention more than Obama’s middle-class tax cut), it turns out that Reilly is still low-balling the cost of cap and trade by using some fuzzy logic. In reality, cap and trade could cost the average household more than $3,900 per year.
Business Insider Emails & Alerts
Site highlights each day to your inbox.