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Ignoring transaction costs, that system is equivalent to a tax where the revenue is dispersed on a per capita basis. All it does is increases transaction costs
by pianom4n 9y ago
Ignoring transaction costs, that system is equivalent to a tax where the revenue is dispersed on a per capita basis.
All it does is increases transaction costs for no benefit (that I see). Also, it's pointless to care about the distribution effects of individual policies rather than overall government transfers.
- ghfbjdhhv 9y agoThere is a reflexive anti-tax “starve the beast” mentally among many. A common argument is “they claim the purpose of the tax is to [achieve goal X], but really they just want more revenue.” Even if a cap and trade system is economically equivalent to a carbon tax, it might be more politically palatable because it doesn’t use the tax mechanism.