Friday, June 26, 2009

How big a tax? 

Last night Janet posted at True North about the cost of cap-and-trade legislation and her call to Colin Peterson, a Minnesota Democrat from a declining region of farms, lakes and empty nests. Heritage has posted a calculation of the costs of the Waxman-Markey bill by congressional district. Districts have roughly the same number of people of voting age, but can differ greatly in the type of economies they have and the incomes earned by the people of the district. To correct for that, I adjusted each cost applying to the district for year 2012 as Heritage estimates by my estimate of how much each district creates in personal income. The variation goes from under $18 billion in CD-7 (Peterson) to over $31 billion in CD-3 (Paulsen). Here's what I get:

Congressperson Lost personal income % 2012 Lost jobs 2012
Walz 2.35% 3871
Kline 1.09% 3835
Paulsen 1.41% 4496
McCollum 2.31% 3984
Ellison 1.60% 3819
Bachmann 1.24% 4127
Peterson 2.41% 4174
Oberstar 1.46% 3340

This is a tax therefore that varies but bears down hard on Collin Peterson's district. It will cost CD-3 more jobs, but the impact there is less as a share of income.

Let there be no doubt that this is a huge tax increase: taking 2% more of one's income when the government takes about 12.6% of your income in the federal individual income tax for the average taxpayer. In a poor district with a large farm sector, it's worse. I know that Peterson says he got "concessions". It's dubious whether the concessions mean much even to Peterson's constituents. For them, it's unlikely to be less than an across-the-board 20% tax increase. If Peterson does vote for this stinker, someone should take that fact to the debate as his opponent next year.

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