Wednesday, July 22, 2009

Presidential Earmark

Cap and trade is the practice of the government imposing emission limits on companies. When a company emits more than the federal government allows, it must purchase "carbon offsets" from companies that are below the government's allotted amount.

Cap and trade is a highly contested issue, and the arguments for and against it fall pretty much exclusively along party lines.

The argument made most frequently by Republicans are as follows. Inarguably, cap and trade forces the companies that have to pay for carbon offsets on to us. Second, China and India, the other global emissions leaders, refuse to set limits on their emissions. Consequently, the United States becomes a country that penalizes its own companies, and then forces the aforementioned companies to relocate to other limit-free nations. Additionally, if other emission leaders will not follow America's example and cap their emissions, America's efforts are inconsequential.

This, however, is not the truly crooked aspect of cap and trade.

Goldman Sachs, an investment banking and securities firm, made $2 billion last year and paid no federal income taxes. (In case you've forgotten, the United States began to experience a bit of a recession last year.) Isn't this a bit hypocritical considering senators, like self-described democratic socialist Bernie Sanders (I-Vermont), see no problem taxing the wealthiest 1% of Americans an amount he will not disclose?

The reason Goldman Sachs was spared of what would be hugely disproportionate taxes, if Bernie Sanders got his wish, is it owns a 10% share in the exchange where the cap and trade deals will be made. On each deal, a commission will be paid to the investors involved in the exchange. So, Goldman Sachs pays no taxes but stands to make millions more than they already do.

Furthermore, Goldman Sachs' employees gave Obama's campaign close to $1 million. Sounds a lot like a Presidential earmark.

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