If you look at page 180 of the 451-page monster bailout bill that easily passed the Senate yesterday (PDF here), you will see that it includes at Section 116 language about the tax treatment of “industrial source carbon dioxide.” It also provides, at Section 117, for a “carbon audit of the tax code.”
What could a provision about the tax treatment of “industrial source carbon dioxide” and another provision about doing a “carbon audit” of the tax code possibly have to do with restoring confidence in Wall Street’s troubled credit and banking markets?
The answer: NOTHING.
This appears to be an attempt by global warming alarmists to lay the foundation for a carbon tax in the middle of another crisis, hoping nobody will notice.
Call your congressman now! More at Planet Gore
UPDATE FROM CAPITAL RESEARCH:
Apparently the bill with the carbon provisions existed already and was passed by the Senate. So, the Senate used the bill as a vehicle for advancing the bailout package. They couldn’t under the Constitution initiate a spending bill in the Senate, so they had to amend one that was already passed by the House. Nonetheless, what was so urgent about the carbon provisions that they had to go with the bailout bill? Who decided which bill to use as the vehicle? Why not pick a non-controversial bill? My guess would be that Senate Majority Leader Harry Reid made the call but it’s just a guess.
An expert offers a better explanation of one of the carbon-related provisions that is in the Bailout 2.0 bill.
According to this wizard of Wall Street, one provision provides preferential tax treatment for publicly-traded partnerships when they trade so-called carbon offsets. It was reportedly already passed in another bill: What’s so urgent about that tax provision that it absolutely had to go into another bill that aims to deal with a financial emergency? So, you can see it’s a little more complex than explained above. However, it’s still bad because it gives legitimacy to these strange indulgences known as carbon offsets and provides a tax incentive for trading them.
I am also informed by this source that Henry Paulson did not push to insert these two carbon-related provisions, but he certainly didn’t object to them, and his track record strongly suggests he would support them. When he ran Goldman Sachs, Paulson released a statement specifically endorsing carbon trading. As the Washington Post reported (June 1, 2006) reported: Last year under Paulson’s direction, Goldman Sachs issued an eight-page position paper on environmental policy, saying it accepts a scientific consensus, led by United Nations climate experts, that global warming poses one of the greatest threats this century.
Like Bush, the Goldman Sachs statement endorsed a market for businesses to buy and sell rights to emit greenhouse gases, saying it will spur technology advances by companies “that lead to a less carbon-intensive economy.” But, it added, “Voluntary action alone cannot solve the climate change problem,” a position contrary to the Bush administration’s view.
Source: Capital Research
The text of the provision on page 180 of the bill (PDF here) is in full below:
Lines 1-4
SEC. 116. CERTAIN INCOME AND GAINS RELATING TO IN
DUSTRIAL SOURCE CARBON DIOXIDE TREATED AS QUALIFYING INCOME FOR PUBLICLY TRADED PARTNERSHIPS.
5 (a) IN GENERAL.—Subparagraph (E) of section
6 7704(d)(1) (defining qualifying income) is amended by in7
serting ‘‘or industrial source carbon dioxide’’ after ‘‘tim8
ber)’’.
9 (b) EFFECTIVE DATE.—The amendment made by
10 this section shall take effect on the date of the enactment
11 of this Act, in taxable years ending after such date.
12 SEC. 117. CARBON AUDIT OF THE TAX CODE.
13 (a) STUDY.—The Secretary of the Treasury shall
14 enter into an agreement with the National Academy of
15 Sciences to undertake a comprehensive review of the Inter16
nal Revenue Code of 1986 to identify the types of and
17 specific tax provisions that have the largest effects on car18
bon and other greenhouse gas emissions and to estimate
19 the magnitude of those effects.
20 (b) REPORT.—Not later than 2 years after the date
21 of enactment of this Act, the National Academy of
22 Sciences shall submit to Congress a report containing the
23 results of study authorized under this section.
24 (c) AUTHORIZATION OF APPROPRIATIONS.—There is
25 authorized to be appropriated to carry out this section
26 $1,500,000 for the period of fiscal years 2009 and 2010.
According to Snowfalcon
“And what’s all this about ’socialist’ plots – you guys over the pond have no idea what a socialist really is – I agree with Pamela Gray, the plotters are corporate banking types who have misled the greens (who are naive and gullible), and see an easy market – this is not about ’socialist ‘ control – it is about hidden agendas for wealth creation for an elite riding upon misled environmental concern.”
This statement appears to be taken from Barney Franks playbook. Set up a system to Force the banks to make loans to people who have no downpayment or means to make the payments, disparage those who warn the system is headed for a trainwreck, when the scheme collapses blame the greedy bankers, and finally tell the taxpayers they will be stuck with the bill.
Barneys scheme was about socialist control and so is carbon credits/tax!!
snowfalcon, I also agree with Pamela Grey, but when the corporations are mixed with the government, it becomes a socialist society. We may not be there yet, but many politicians are pushing hard in that direction. The carbon tax is just another cost to the taxpayers. I would not be surprised to see electricity go up 3-500% in the next few years. Denmark (lots of wind energy) is paying upwards of $.35/Kwhr (US), I am now paying $.08/Kwhr. Of course, this would not be raising ‘taxes’ on those making less than $250K/yr., it taxes the energy corporations who simply pass on their tax increase to the customer.
The tax credit bill that the Senate attached to the bailout legislation is not new, nor is it primarily about climate change. It has been called the ‘extenders’ bill – it extends tax credits for renewable energy production (wind, solar, biodiesel), a one-year fix for the AMT, and a bunch of other provisions favored by Republicans and Democrats alike.
It was passed in stand-alone form by the Senate 92-3 last week. A slightly different version has already been passed by the House three times this year. The problem – the Senate version is not revenue-neutral, i.e., it will increase the deficit. The revised PAYGO rules of the House make it almost impossible to pass as a stand-alone bill. The House versions of the bill contain revenue-raising provisions designed to punish the petroleum industry, which has resulted in Republican filibusters in the Senate.
By attaching this popular bill to the financial bailout legislation, the Senate is attempting to break the deadlock and get the extenders bill passed. This is how our Congress works today (I am using the term ‘works’ loosely.)
This is one of the many reasons this bull (I mean bill) is being rushed through Congress. I much more sensible approach would be to dole out the money in increments, starting with about $150 Billion, and then add more as needed and if things were going well with the program. I can’t imagine we can possibly spend all $780 Billion in the next few weeks, so why not slow down?
Paulson IS an AGW- and enviro-nut. He’s also too close to Wall Street and too close to a certain party now running Congress that caused this mess because they wanted more home loans to people who didn’t qualify.
Anthony,
Great post pointing out an inappropriate item added to the rescue plan by the Senate. Unfortunately there are a lot more. They should be ashamed of themselves feeding on the taxpayer at a time where some action is needed (at least by many). They are worse than a predatory lendor taking advantage of someone in dire need. What a disgrace.
When I first saw the Senate leaders come out during the press conference and explain their rescue Bill, I thought at last there is some hope in the Senate. Boy was I naive !!!
Now we know that the $700 bill grew to $812 billion and was filled with all kinds of goodies for NASCAR, wooden Arrows, extending tax breaks for film and television productions, mine rescue training, undercover operations, railway maintenance, idling reduction units in trucks, refined coal used by steel producers, small wind power projects, donations of food or books to charities, hurricane relief employees and people affected by the Exxon Valdez oil spill, etc.
Also burried in the bill is increased taxes on fossil fuels that will increase the price of gasoline and heating oil. See the URL below.
http://www.chron.com/disp/story.mpl/business/6035335.html
They should have told us about this during the press conference.
The line item veto …
Such snipping would no longer be enough. The senate took a 100-page bailout by Paulson/Bernanke and created a 450-page, pork-laden monstrosity.
Who inserted the carbon credits nonsense?
Bill in the House this morning. It’ll probably pass, but that is not for sure yet. Just like Congress to “pork a bill”. I wish I could run my house like Congress. I could live like a “fat cat”. But, that’s not reality, and I wish Congress would be like the rest of us. I guess I have a better chance of get hit by lightning, than for that to come true. Seems like no matter who you put there, they become Washingtonized at some point.
John Nicklin (21:21:56) :
“…I’m an outsider and what I know about your legislative process could be put in a thimble with room to spare for your finger.”
That puts you on a par with the average American voter.
This whole bailout stinks. Ties between Paulson / Goldman, the shotgun marriage of Merrill Lynch / BOA, failed lenders everywhere… I hear senators are now proposing (to the approving cheers of mortgage banks) that troubled housing loans will not only have their interest reduced to a smaller fixed amount, but the principles as well. Great! Can I get a retroactive reduction in and reimbursement for the “excess” principle I’ve been paying, along with the interest and taxes we’ve paid (indeed, pre-paid whenever we had extra) over the last 15 years?
Citizen complaints about this bill, or sections of it, are justified and appropriate, but better be quick. Pressure on the House seems to be building, and pretty soon, whatever the bill was at its heart will be covered over with the layers of porcine excess.
“…Palin’s curious remark as to global warming…”
She was incoherent, trying to come down on both sides. Not impressive.
Politicians need to hear the mantra repeated: It’s getting cooler.
Well it passed. It’ll go to the President, who will sign it.
House passes bill
By vote of 268 – 148
Final bill: H.R.1424 Emergency Economic Stabilization Act
SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.
[…] the Carbon Tax language as of yesterday, no word yet on if it changed […]
By a vote of 261-171.
172 Dems and 91 Reps voted YES
63 Dems 108 Reps voted NO
Whoops please scratch that one. I don’t know the numbers, they keep changing.
The following link I found at Climate Skeptic. Oddly, there is a relation to the current financial crisis, and AGW.
Click here for NYT video
My summary of the NYT video:
5 firms – Goldman Sachs, Merril Lynch, Lehman Bros, Morgan Stanley and Bears Stern, applied in Apr 2004, to change investment rules. Basically, they were allowed to use computer models to assess the level of risk in investments.
My commentary:
Gore says that climate models can be trusted, because Wall Street has used similar models for years.
Look how that turned out, on wall street, for these firms.
The weakness, or outright failure of each, is a major contributor to the financial crisis of 2008.
Now, my question to the believers of Climate Models:
Should we invest 40 trillion in these models?
My question to the SEC:
ARE YOU GUYS ON CRACK?
It passed…ghad help us all……
cdl
“Don Shaw (05:43:44)”
“This statement appears to be taken from Barney Franks playbook. Set up a system to Force the banks to make loans to people who have no downpayment or means to make the payments, disparage those who warn the system is headed for a trainwreck, when the scheme collapses blame the greedy bankers, and finally tell the taxpayers they will be stuck with the bill.
Barneys scheme was about socialist control and so is carbon credits/tax!!”
Don I think you nailed it. I would add one further point which can also be blamed squarely on government. The free trade deals which were enacted by both parties have caused American industries to move their plants to China for low labor costs. The displaced American workers found themselves unemployed or employed at lower paying jobs. So the mortgage payments which were affordable when the wages were higher, are now unaffordable and the homeowner is forced into default.
Bah! But you all knew this was coming. Every time something repugnant comes across the halls of Congress it gets dolled up with bits that the potential “Nays” cannot refuse and passes even though no one really likes it. Don’t let the “Yea” voter in your Congressional district get away with it. Too bad there isn’t a comments line on the ballot to explain why you voted for or against someone.
“Limit Down.”
The futures markets for stock indexes are currently (8:45 a.m. EDT) “locked,” because they have reached their down limit of a 5% price drop.
When the NYSE opens, the limits change to 10% – when the Dow and S&P 500 drop by 10% trading will be halted for 1 hour. This could happen within the first few minutes of trading.
The percentage limits are set at the beginning of each calendar quarter. The 10% limit was based on a Dow of 11,000, so the drop that halts trading will be 1100 Dow points.
The “silver lining” if there is one, is that oil prices have also crashed, even with an OPEC “emergency cut” of 1.5 million BPD.
So why was it so important to pass this crappy bailout bill again?