Carbon Tax Problems

We support a modest carbon tax that would be coupled with entitlement reform and eliminating subsidies for alternative energy.  Robert Bryce at NRO tries to harsh our Patriot buzz when he identifies three major problems with a carbon tax:

  1. It is regressive
  2. It will be lobbied heavily
  3. International stuff:
    1. Tariffs on imported carbon
    2. Free riders

We think that our proposal has taken care of the regressive issue.  By eliminating the gas tax it substitutes one regressive tax for another.  The exact rate for the carbon tax might be less than the current gas tax so there is little impact on lower income folks.  In addition by eliminating subsidies and requirements for alternative energy the net impact on heating bills will be small and in an uncertain direction.  Of course, an important part is to keep the carbon tax modest.

Robert is exactly right that any tax will be heavily lobbied.  The danger that worries us most is an onerous carbon tax.  We need to expect something from our Congress Critters on both sides of the aisle.  We agree with Robert that this is a big ask but they really need to earn their pay.

We don’t care about the free rider issue.  This is about US policy that would move in the right direction on climate change.  As Robert points out it is hard to get the world to agree.  We care about US policy.  At first glance tariffs on imported carbon make sense but we are open other views.  We are highly unimpressed with the argument that the arithmetic is too hard.  We think that the US government can find somebody to do the arithmetic if imported carbon is to be taxed. If we can figure out state taxes for people like Tom Brady, who played in nine different states (ten if preseason matters for taxes) this year, we can do carbon.  But Robert has broached the real question: can we get it passed?  We are pessimistic but we also remember that the Patriots were trounced in their only two Super Bowls in the last century but have won six this century.  We are not expecting Congress to become the Patriots of the current century but we can hope for improvement.


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