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PolitiFact: Sorting out the truth in politics

GOP uses false claim anyway

The statement

"The Administration raises revenue for nationalized health care through a series of new taxes, including a light switch tax that would cost every American household $3,128 a year."

House Republican Conference on March 24 in a press release and Web post

The ruling

"Light switch tax" is a reference to President Barack Obama's proposal to tax power companies for carbon dioxide emissions and allow companies to trade emissions credits. That's called a cap-and-trade program, and Republicans say the companies would just pass the tax on to electricity consumers.

So any revenue raised by a cap-and-trade program amounts to a "light switch tax" on consumers, the House Republicans alleged.

To back up the claim, staffers pointed us to a report by the Massachusetts Institute of Technology, which found that a similar cap-and-trade proposal (the Obama administration has not yet detailed its version) would raise $366 billion per year. If you divide that by the 117 million households in the United States, it would cost each household $3,128, they said.

But is it that simple? No.

"It's just wrong," said John Reilly, an energy, environmental and agricultural economist at M.I.T. and one of the authors of the report.

Get this: House Republicans asked Reilly if their calculations were correct and he told them they weren't. But the GOP is using them anyway.

Reilly said the cost to corporations can't be applied directly to consumers. In fact, the M.I.T. report did include an estimate of the net cost to individuals for the program it studied. It would be $30.89 per person in 2015, or $79 per family if you use the same average household size the Republicans used of 2.56 people. Not exactly $3,128.

If the Republicans had simply misstated the results of the MIT study, the Truth-O-Meter would have been content giving this one a False. But repeating the claim after the author of the study told them it was wrong sets the meter ablaze. Pants on Fire.

Alexander Lane, PolitiFact staff writer

PolitiFact: Sorting out the truth in politics 03/31/09 [Last modified: Tuesday, March 31, 2009 9:26pm]
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