More Evidence That Cap-And-Tax Is Regressive

Jillian Bandes
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Posted: Sep 29, 2009 1:34 PM
Sens. Kerry and Boxer are introducing cap-and-trade legislation this week -- probably tomorrow -- which the nonpartisan Congressional Budget Office has determined will have a progressive tax impact on Americans across income groups. Not so, says a new report from a leading independent economics research firm.
Under the assumption that company shareholders will enjoy the benefit of free allowances under Waxman-Markey, households in the nation’s highest-earning quintile would profit by $604 per year on a net basis from the legislation. In contrast, the lowest earning 80 percent of households would bear net burdens of between $31 and $512 per year, with the heaviest burdens borne by the three middle quintiles that broadly constitute the nation’s “middle class.” Under this assumption, the Waxman-Markey bill would effectively redistribute approximately $14 billion per year from the lowest-earning 80 percent of households to the highest-earning 20 percent of families in the nation.
This follows in the footsteps of earlier research by the Tax Foundation.