Oh No We Won't!

Cap and Trade is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. The government sets a limit, or cap, on the amount of a pollutant that can be emitted.

The Reality:

Cap and trade is the tax that dare not speak its name, and Democrats are hoping in particular that no one notices who would pay for their climate ambitions.

Politicians love cap and trade (Cap and Tax) because they can claim to be taxing "polluters," not workers. Hardly. Once the government creates a scarce new commodity - in this case the right to emit carbon - and then mandates that businesses buy it, the costs would inevitably be passed on to all consumers in the form of higher prices. Mr. Obama's budget director told Congress last year that "Those price increases are essential to the success of a cap-and-trade program."

Hit hardest would be the "95% of working families" Mr. Obama keeps mentioning, usually omitting that his no-new-taxes pledge comes with the caveat "unless you use energy." Putting a price on carbon is regressive by definition because poor and middle-income households spend more of their paychecks on things like gas to drive to work, groceries or home heating.

The Congressional Budget Office (CBO) estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That's about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%.