According to a new study by the nonpartisan American Council for Capital Formation, cap-and-tax legislation such as the House-passed Waxman-Markey bill or the Kerry-Lieberman proposal in the Senate would amount to a national energy tax that particularly harms the Midwest, especially Michigan as detailed in the study.  Other states that rely on coal for electricity and have a large manufacturing sector, such as Indiana, Ohio, Wisconsin, Kentucky, and Iowa can expect similar effects.

The study shows that, in an already depressed economy, these bills would increase the price of electricity, gasoline and natural gas—leading to a decline in economic productivity, employment and household income in states dependent on manufacturing jobs and electricity derived from coal.

In Michigan, for example:

-- Manufacturing output would decline by up to 6 percent in 2030;

-- Transportation manufacturing would decline by up to 9 percent in 2030;

-- Gross state product (GSP) would decline by $12 billion to $16.5 billion in 2030, dramatically reducing state budget receipts;

-- There would be 66,700 to 90,800 fewer jobs in 2030.

-- Disposable income would fall by an average of $883 to $1,435 in 2030.  Low-income families and the elderly will spend an especially higher proportion of their income on energy.

As Rep. Fred Upton (R-MI), Co-Chair of the American Energy Solutions Group, noted, “Kerry-Lieberman puts a bullseye squarely on the backs of Michigan’s working families who are already struggling to keep the lights on.  In Michigan where nearly one out of every five folks is out of work, jobs must be our top priority, not a national energy tax.”