By Learned Foote- Talk Radio News Service

The Senate Committee on Finance held a hearing to assess what impact the Obama administration’s carbon cap and trade program might have on tax legislation. 

The committee’s testimony dealt with a narrow set of questions such as whether or not carbon allocations should be distributed for free or auctioned off, and whether or not carbon allocations should be considered income or capital asset. In addition, the committee debated whether or not previous legislation governing the emission of sulfur dioxide can be used as an analogy to carbon taxes.

A panel of tax policy experts offered contradictory pieces of advice to the committee. 

“In considering the direction for the tax treatment of CO2 allowances, the most logical place to start is with the current treatment for SO2 [sulfur dioxide] and NOX [nitrous oxide] allowances. These allowances were established under Title IV of the Clean Air Act Amendments of 1990,” said Keith Butler, Senior Vice President of Tax at Duke Energy. “These allowances should be granted with zero-tax basis and they should not be taxed upon granting it, because that just creates an ultimate cost that I don’t think we need to create,” he said. 

“To use that distant stuff from the past for this new market which is so vast is, you know, I mean, why don’t we bring over the laws from Amsterdam and apply them in New York today,” said Gary Hufbauer of the Peterson Institute for International Economics. He added that carbon allocations should be treated as income rather than capital gains, and that following the precedent set by SO2 caps is “mind-boggling.” “What you’re gonna do is throw out a couple hundred billion dollars,” he said. 

According to committee chairman Senator Max Baucus (D-Mont.), the SO2 cap governed less than 120 facilities, whereas a carbon cap and trade program would affect over 7,000 entities if enacted. All of the panelists agreed that the analogous legislation would have to be revised if a carbon cap and trade proposal is enacted, and Hufbauer said that a “blank slate” would be most appropriate.

Nicole Tichon of the United States Public Research Interest Group, talks about how Obama’s tax plan will bring an end to the era where “high-priced accounts are valued over hard work and responsibility.” Additionally, she stresses how tax loopholes, like hiding money in off-shore accounts, has caused the middle-class to pay a disproportionate amount of taxes. (0:32)

 

 Standard Podcast: Play Now | Play in Popup | Download

The Democratic National Committee held a conference call and discussed Sen. John McCain’s (R-Ariz.) “disastrous” week on the campaign trail. McCain was supposed to strengthen his stance on his economic policy this week, but instead showed how “out of touch” he is with the challenges that America’s families are facing. Sen. Debbie Stabenow (D-Mich.) said that she was insulted on behalf of the people she represents by McCain’s words and actions. She explained that McCain doesn’t understand what Americans go through everyday just to make ends meet and how his support for more years of a Bush economy would be disastrous for American families. (more…)

 

 Standard Podcast [24:49m]: Play Now | Play in Popup | Download

In a conference call, republican presidential candidate Sen. John McCain’s supporters criticize Barack Obama’s recent comments on gas prices and tax policy. (10:27)

 

 Standard Podcast [10:27m]: Play Now | Play in Popup | Download

Arizona republican Senator John McCain’s presidential campaign held a conference call addressing the comments of Senator Barack Obama concerning what to do with appalling gas prices and tax policy.

Speaking during the call was Congressman Eric Cantor (R-VA) who described Obama as a candidate “out of touch” with the middle class Americans he claims to support. Cantor said that Obama’s recent sentiments suggested Americans should “get used to” high gas prices.

Doug Holtz-Eakin, senior policy advisor to Senator McCain, continued to advocate McCain’s calls for a “gas holiday” this summer, which he claimed would give Americans the immediate relief they desperately need. Also, Holtz-Eakin said McCain’s employment policy was structured to keep American workers in America, as opposed to having company’s ship jobs overseas.

Holtz-Eakin also said Obama has claimed he wants to spend more money to implement his plans, but that he also wants to cut taxes, which is an impossible goal to realize.