In his first joint address before Congress, the President promised that his new budget would not raise taxes on anyone making more than $250,000. It was a clever word game that didn't reveal the ugly costs that he will pass on to every American in the form of something called "Cap and Trade".
Briefly, Cap and Trade is a scheme whereby the government turns carbon dioxide into a commodity and sets a top-end limit (the "cap") on the amount of carbon a given company is allowed to produce. Companies that produce less than that cap can sell their carbon surplus to a company that is likely to go over their cap. Simple, right?
Let's try a quick example. You own company and your carbon cap is 100 tons per year. By the end of the year, you know that you're only going to produce 75 tons of CO2. My company, on the other hand, is "dirtier" than yours and I'm likely to exceed my carbon cap by 25 tons. I can make a deal to buy your extra 25 tons from you, making my cap 125 tons.
Remember, the object here is to reduce overall carbon emissions. Proponents of Cap and Trade hope that by slowly (or not so slowly, depending on who you ask) bringing the cap down on all companies, the government can lower America's overall emissions.
That process has not worked in Europe, though, which has has Cap and Trade schemes operating for several years. Instead of lowering CO2 emissions, most European countries have seen their emissions increase, along with the cost of energy and cases of fraud created by the new and very lucrative CO2 market.
Here's one reason why that happened. Making CO2 a commodity (like gold or oil) creates an incentive for companies to focus on trading their carbon credits instead of whatever the business was doing before. It is very easy to envision a case where a company figures out that it is more profitable to slow down production and lay off employees than it is to modernize its operation. Both will realize a decrease in CO2 production, but the latter will, at least in the short term, cost the company much less money.
In short, many companies will make their main business the selling of carbon credits because they can make more money more quickly. The Heritage Foundation found testimony in 2007 that estimated job losses from such a scheme could be between 1.2 million and 2.3 million by 2015.
That may not be a tax increase, but it's going to cost us plenty.