3 ms·

Taxes are explicit market intervention. How are they a libertarian approach?

WalterBright 6y ago
Pollution is an "externality", meaning the cost of it is dumped on society. By taxing it, one "internalizes" the externality meaning it is only done if the cost of it is justified. It causes market forces to work on polluting activities. The tax rate is adjusted to reflect the true cost of it. For example, an amount of CO2 emissions for the country per year can be set, and then CO2 taxes adjusted until that target is met. Import tariffs can be added to reflect the amount of CO2 emissions the originating country is generating.
- burrows 6y ago
  Ok, I agree to some extent. CO2 emissions are analogous to a madman releasing a slow-acting airborne poison. The government should use its force monopoly to stop the madman. Unfortunately, any tax is another dollar toward government expansion. The madman should directly compensate his victims.
  - WalterBright 6y ago
    Commensurate with pollution taxes I propose reductions in taxes on productive activities, so that it is revenue neutral. Keep in mind the maxim: 1. to get more of something, subsidize it 2. to get less of something, tax it The CO2 tax proposal failed in Washington State because it was perceived as a money grab by the state. If it came with a corresponding reduction in the sales tax, it likely would have passed.
    - burrows 6y ago
      A revenue neutral tax still lets the government do new stupid things. eg, they can choose winners and losers by taxing industries at different rates. And once we have a tax, we have it forever. CO2 pollution is unique because the damage to private property hasn’t “happened” yet. But waiting for it to “happen” is waiting too long. If a factory dumps toxic waste in my field, I’ll sue for destroying my soil and crops. If a factory’s air pollutant gives me lung cancer, I’ll sue for assault. CO2 emitting factories hypothetically cause coastal asset depreciation, but what do the courts think?

Pollution is an "externality", meaning the cost of it is dumped on society. By taxing it, one "internalizes" the externality meaning it is only done if the cost of it is justified. It causes market forces to work on polluting activities. The tax rate is adjusted to reflect the true cost of it. For example, an amount of CO2 emissions for the country per year can be set, and then CO2 taxes adjusted until that target is met. Import tariffs can be added to reflect the amount of CO2 emissions the originating country is generating.

burrows 6y ago
Ok, I agree to some extent. CO2 emissions are analogous to a madman releasing a slow-acting airborne poison. The government should use its force monopoly to stop the madman. Unfortunately, any tax is another dollar toward government expansion. The madman should directly compensate his victims.
- WalterBright 6y ago
  Commensurate with pollution taxes I propose reductions in taxes on productive activities, so that it is revenue neutral. Keep in mind the maxim: 1. to get more of something, subsidize it 2. to get less of something, tax it The CO2 tax proposal failed in Washington State because it was perceived as a money grab by the state. If it came with a corresponding reduction in the sales tax, it likely would have passed.
  - burrows 6y ago
    A revenue neutral tax still lets the government do new stupid things. eg, they can choose winners and losers by taxing industries at different rates. And once we have a tax, we have it forever. CO2 pollution is unique because the damage to private property hasn’t “happened” yet. But waiting for it to “happen” is waiting too long. If a factory dumps toxic waste in my field, I’ll sue for destroying my soil and crops. If a factory’s air pollutant gives me lung cancer, I’ll sue for assault. CO2 emitting factories hypothetically cause coastal asset depreciation, but what do the courts think?