Government gets more of our money, and utility companies get the blame when they pass on the tax increase to consumers.
To counter the administration’s attempt to bury this tax increase in our utility bills, I am sponsoring legislation to require utility companies to itemize on customer utility bills the cap-and-trade taxes that utility companies are passing on to their customers. As regulated entities, utilities pass on 100 percent of their taxes to customers, unlike other businesses, which pass on taxes to shareholders and employees as well as customers. Under my bill, every month, when utility customers - residential and business - receive their utility bills, they would clearly see how much the cap-and-trade tax is really costing them. While government may get our money, it also would get the blame. This is about transparency. If cap-and-trade taxes are such a good idea, why not let taxpayers see how much those taxes will really cost them?
The left obviously does not want taxpayers to know the real cost of the tax-and-trade scheme even though sound tax policy dictates that taxes should be visible to taxpayers and not buried in the cost of the items we purchase.
Of course, when you are trying to raise taxes by $1.5 trillion over 10 years, you want to hide as much of this tax increase as possible. That’s why Mr. Obama is raising a lot of other taxes on business that won’t be readily visible to taxpayers. Excluding cap-and-trade taxes, Mr. Obama proposes a net tax increase on businesses of $327 billion over 10 years. Businesses will pass on these taxes to consumers in the form of higher prices or pass them on to employees in the form of lower wages and benefits or pass them on to shareholders, including the millions of Americans who own 401(k) accounts. Also, a large share of the tax increase on individuals will be imposed on owners of LLCs and subchapter S corporations.
Taxes on business are generally problematic. In addition to hiding the real cost of government, business taxes reduce the competitiveness of U.S. companies in international markets. Increasing U.S. exports and reducing our trade deficit are key components to our short-term economic recovery and long-term economic growth. The cap-and-trade tax will be especially onerous on American manufacturers and will incentivize them to relocate their facilities to countries that choose not to impose punitive taxes on their own domestic production. A strong manufacturing industry is critical to increasing exports and also is one of the higher-paying sectors in our economy.
Conservatives have long pointed out that the U.S. corporate income tax rate is the second-highest in the developed world. Instead of lowering corporate tax rates to incentivize production in America, Mr. Obama wants to raise taxes on businesses.
Nevertheless, if Mr. Obama insists on pursuing massive tax increases on American consumers and businesses, he should at least be upfront on how much it will cost us. That’s why he should support legislation to require utility companies to disclose on customer utility bills the cap-and-trade tax that is being passed on to consumers.
Jason Chaffetz, Utah Republican, is a member of the House of Representatives.