There’s lots to talk about in Obama’s massive 2010 budget. The administration is talking up their proposal to have their “Making Work Pay” $800 tax credit made a permanent fixture of the federal budget. This is the much trumpeted “tax relief for 95 percent of Americans.” In a classic Democrat move however, Obama is planning to pay for this credit by raising everyones energy bill.
Over $525 billion created from Obama’s new climate change cap and trade program will be dedicated to paying for the tax credit. The extensive carbon capping program would directly lead to an increase in energy prices of more than $500 per family. When you factor in the increased cost of goods manufactured with more expensive energy, the average family could see a cost increase of more than $1000.
Most of the time the government give and take game isn’t so patently obvious. Here we have a direct example of how hollow any tax reduction from this administration is. Providing a mediocre tax credit that doesn’t grow with inflation will not offset the increase in cost every time you turn on the lights and every time you buy a manufactured product.