3 ms·

I am surprised that "add carbon taxes, cut income taxes" doesn't take off. Income taxes distort the economy, so lowering them is a massive benefit - if they can

by graeme 9y ago

I am surprised that "add carbon taxes, cut income taxes" doesn't take off. Income taxes distort the economy, so lowering them is a massive benefit - if they can be replaced with another, better revenue source. A carbon tax is an infinitely better revenue source as it reduced externalities. I think rather than focussing on emissions reduction, global climate talks should focus on a global carbon tax, offset by reductions in other taxes. (It's somewhat ineffective for one country to do a carbon tax now. Past a certain point it will just send carbon producing activities to countries without a tax. A globally agreed tax reduces this.) A tax would be the mechanism to reduce emissions. Absent such a mecanism, emissions have only grown, despite accords to reduce them.

hedora 9y ago
Carbon taxes are regressive. I’m not disagreeing with your premise, but it makes them politically difficult. (Global warming will hit the poor the hardest too.) Anyway, it is easy to make the carbon capture economy work, assuming you’re OK with instituting a fair carbon tax: Give carbon capture plants 0.5 tons of carbon credit for each ton captured, and have the government sell unlimited carbon credits at 2x the market rate capturers charge. I guess cutting income/corporate tax (could they even go negative?) could prevent this from crashing the economy, and let you adjust for the inherently regressive nature of fuel taxes.
- graeme 9y ago
  Do credits have a good track record anywhere? My assumption is that the system will develop leaks and exceptions. Taxes do have a track record of being applied successfully. If regressivensss is a concern, you can either cut another regressive tax, or implement some kind of carbon dividend.
  - skosch 9y ago
    Yeah, regressiveness is easily overcome by dividing up the money among the population and giving everyone a constant income tax decrease – that way it's wealth transfer down, not up. In case you haven't heard of it: Citizen's Climate Lobby [1] exists purely to advance this scheme, and is well worth investing your volunteering time into. [1] https://citizensclimatelobby.org/ https://citizensclimatelobby.org/
  - graeme 9y ago
    I should also add that if we don't solve this, we basically destroy the planet for all future generations. "Marginal increase in regressive taxation load in the present" doesn't seem that bad, in that view. Though I do agree it affects the politics of it. Of course, there's also the non-neglible social benefits of lower income taxes.

by graeme 9y ago

hedora 9y ago

Carbon taxes are regressive. I’m not disagreeing with your premise, but it makes them politically difficult. (Global warming will hit the poor the hardest too.) Anyway, it is easy to make the carbon capture economy work, assuming you’re OK with instituting a fair carbon tax: Give carbon capture plants 0.5 tons of carbon credit for each ton captured, and have the government sell unlimited carbon credits at 2x the market rate capturers charge. I guess cutting income/corporate tax (could they even go negative?) could prevent this from crashing the economy, and let you adjust for the inherently regressive nature of fuel taxes.

graeme 9y ago
Do credits have a good track record anywhere? My assumption is that the system will develop leaks and exceptions. Taxes do have a track record of being applied successfully. If regressivensss is a concern, you can either cut another regressive tax, or implement some kind of carbon dividend.
- skosch 9y ago
  Yeah, regressiveness is easily overcome by dividing up the money among the population and giving everyone a constant income tax decrease – that way it's wealth transfer down, not up. In case you haven't heard of it: Citizen's Climate Lobby [1] exists purely to advance this scheme, and is well worth investing your volunteering time into. [1] https://citizensclimatelobby.org/ https://citizensclimatelobby.org/
- graeme 9y ago
  I should also add that if we don't solve this, we basically destroy the planet for all future generations. "Marginal increase in regressive taxation load in the present" doesn't seem that bad, in that view. Though I do agree it affects the politics of it. Of course, there's also the non-neglible social benefits of lower income taxes.