7 ms·

One of my best friends is an academic economist working in this space, so while I won’t pretend to be an expert, I have spent a goodly amount of time discussing

by laingc 6y ago

One of my best friends is an academic economist working in this space, so while I won’t pretend to be an expert, I have spent a goodly amount of time discussing this with one. With no disrespect intended to you personally, this policy you propose makes no sense. Without putting words in your mouth, it looks to me like “two things I as a progressive like the idea of”, rather than a coherent economic policy. Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally. Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich. With respect to UBI, the amount of revenue needed to sustain anything other than a token payment is orders of magnitude more than a carbon tax could ever hope to raise. It’s orders of magnitude more than could ever be raised by any realistic tax, actually, but that’s rather beside the point. It’s fine to like UBI and it’s fine to like carbon taxes, but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence, and there’s certainly no reason to link them as part of a single policy.

antris 6y ago
Quite bold statements there without linking to any sources. "I won’t pretend to be an expert" Yeah, you definitely shouldn't. Also, you are missing the target on the parent comments argument. The carbon tax wouldn't affect the poor as much because the UBI is there to compensate for it, that's kind of the whole point. There's nothing about being poor that forces you to emit more carbon when compared to other people, as far as I know.
- mjburgess 6y ago
  1000 USD / mo / pp for the US is 12k/yr * 300m ie., c. 4 Trillion USD / yr or c. 20% of GDP (20 T) The total amount taxed in the US is already at that level (4T). For the carbon tax to raise 20% of GDP, it would need to raise as much as all present taxes do (income, sales, etc.). Levying that much on consumption (ie., obtaining the present total amount of tax merely from products people buy) would raise prices catastrophically.
  - antris 6y ago
    Back of the napkin calculation is not a source. Economy is a bit more complex. edit: Imagine being downvoted for asking for a legitimate source on HN. Because rejecting UBI by making a simple multiplication is a sufficient explanation instead of researching all the secondary effects that a UBI would bring. Yeah, we've solved it there, I guess! Economists should go find some real jobs /s
  - Taek 6y ago
    The price increases would be offset by the UBI. It's zero sum at an aggregate level.
  - qqqwerty 6y ago
    Only about 30-40 million people would likely net extra income with a UBI. i.e. If you increase my income taxes by $1000 but then give me a $1000 UBI check, its a wash. For some reason folks struggle to wrap their head around that part. Which is why I think a negative income tax is better mechanism.
    - distances 6y ago
      Wouldn't negative tax mean that social programs would still be needed almost in the current scale to account for people with no income?
  - leothecool 6y ago
    Wait, so my taxes would only double? Not being sarcastic at all: this makes UBI sound possible even without a carbon tax. The top bracket would still be lower than what it was in 1960.
    - mjburgess 6y ago
      Not quite. The tax take would double from a consumption tax. Total retail sales (https://www.statista.com/statistics/443495/total-us-retail-sales/ https://www.statista.com/statistics/443495/total-us-retail-s...) is c. 6T. Assuming that most of the 4T comes from taxing the activity represented by retail sales (a very safe bet), you need to get most of 4T from 6T. Ie., you're basically doubling the prices of retail goods -- including food.
- yokaze 6y ago
  > There's nothing about being poor that forces you to emit more carbon when compared to other people, as far as I know. Being poor means having less or no choices. Low income, no or negative capital. You practically have to go with the cheapest at the moment, even if it is more expensive in the long run. So, a low upfront cost gasoline car Vs a more expensive electric car with potential lower TCO. And that doesn't account for the fact that they have no discretionary spending. If everything becomes more expensive, the rich person can simply buy less. I still think it's a sensible idea, simply because the currently socialised costs (co2 emissions & poverty related ones) become explicit.
  - antris 6y ago
    Cheapest option is to not buy a car and or go by public transport or a bike. And the reason why gasoline cars are as affordable as they are now is that the carbon tax is not here and cars are heavily subsidized in general. Carbon tax isn't even really a tax, it's more akin to removing a subsidy (you cannot pollute for free anymore and make someone else pay the costs)
baq 6y ago
OP may have mixed the idea of carbon dividend into UBI which the poor would get more of than they’d pay in carbon taxes.
Ottolay 6y ago
This is a red herring that keeps being brought up with respect to UBI way too often. "Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally." Yes, but rich people consume and release carbon at a much higher rate than poor people. As a result, rich people would pay into consumption taxes/carbon taxes much more than they would get back in a flat cash payment funded by such means.
- simonebrunozzi 6y ago
  Absolutely wrong. Example: Jeff Bezos, worth $150B, or the same worth of approx. 1M Americans, does not consume nor release carbon 1M times more than an average American. Proportionally to his wealth, he's much less affected by a carbon tax. For the same reason, someone below the average wealth and/or income is heavily affected by a carbon tax.
  - garmaine 6y ago
    That’s not what’s being argued. Rather, the poor are going to pay less in carbon taxes than they receive in UBI. This is simply a matter of how power laws and averages work.
  - namdnay 6y ago
    And he will get the same UBI as any other american, so proportionally to his wealth he's much less affected by the UBI stimulus
  - diffeomorphism 6y ago
    Also absolutely wrong. The fact that it stops scaling at millionaires would only be worthwhile discussing if a large share of the population were billionaires. "This tax works great for 99% of the population, but there are some billionaires that should be taxed higher" is more of an endorsement than a counterargument.
  - deleted 6y ago
    [deleted]
  - LordDragonfang 6y ago
yinyang_in 6y ago
Hi, I read once somewhere about it that, if (big if), if we make large transaction to make digital and tax of digital transaction like transaction fees/banking fees, for every transaction we make there is x% of tax is taken by government. It may cause people to not go digital but encourage black money, but if government i.e basically us make a decision that's(non digital translation) are not legal in country. What do you think about it? I see black money, barter system creeping in but in bigger picture what do you think about it This form of tax will take people with more spending to tax more, so people who live beyond their means will be taxed more and poor people will be taxed less.
lambdasquirrel 6y ago
If we're going to have an academic debate, then we should have an academic debate. One academic economist doesn't make a debate. I mean no disrespect to you either but I was friends with a Ph.D at Intel who said the economics were all in favor of general-purpose computing, and therefore, realtime raytracing was the way to go. Embarrassment was on me. I parroted his lines for quite a while. None of us are infallible. Having a Ph.D merely means you know how to do research, in a narrow, focused area. If we are going to have an academic argument – and we really should, if we aren't to just be blabbering off here – we need to see some numbers. We need to know how they are calculated. What's the carbon footprint of these Mexican laborers getting to work 3 to a small-cab truck, or on bicycle, or on BART in the wee morning? And have that compared to the guy in Hamptons with his giant 22-room house here, and other houses elsewhere. Maybe the Mexican guy's taxes will be close to mine. More than is comfortable. That is fine. Carbon taxes don't have to be the only source of income for the government. But until we can see the actual curves, and the total output per segment, etc., we can't actually crunch out what an effective policy is, and we're writing off what's arguably necessary if we're to fix the problem, because we're probably going to have a hard time cutting back emissions until we associate an economic cost to them.
- Alupis 6y ago
  So, what happens if this carbon tax works like I suspect we want it to? Doesn't that mean there will be less carbon tax revenue, because we've compelled companies to be more green? Who pays for the UBI then?
  - sleepychu 6y ago
    The change will be incremental, policy makers will have time to see that the funding is evaporating and identify alternative sources. For example, increased GDP from an economy no longer plagued by pollution and the devastating weather events caused by climate change.
    - zpeti 6y ago
      Right, so you’ve just admitted your argument is flawed, it won’t work in the long run, and “it’s complicated”. But yeah, sounds absolutely perfect, carbon tax plus ubi. Problem is that’s it, it sounds great.
fsloth 6y ago
"With respect to UBI, the amount of revenue needed to sustain anything other than a token payment is ... orders of magnitude more than could ever be raised by any realistic tax, actually, but that’s rather beside the point." I disagree strongly that the cost for UBI would be untenable in the general context. For example nordic countries already have UBI in all but name due to all the support the society gives to those in need. We just don't call it UBI because it's split to several parts. And there is political opposition of course based on the strawman that UBI "would make people lazy". Maybe in some "other" cultures it would (I have no idea where, though), but not in the nordics. So no those in need are forced to go humbly from government desk to the next. "It’s fine to like UBI .. but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence" Disagree again. Poverty reduces peoples life outcomes. Having a scheme that reduces generational poverty will improve educational results, thus increasing life time wages, thus increasing consumption and taxes. " there’s certainly no reason to link them as part of a single policy." Strongly agreed! UBI and carbon tax should have nothing to do with each other. (Sorry, I cropped a bit your comment.)
- kmlx 6y ago
  > For example nordic countries already have UBI in all but name due to all the support the society gives to those in need. We just don't call it UBI because it's split to several parts. that's basic "social welfare". it's not really universal, it's more for those who qualify. in certain countries you can even opt out of this safety net. you mentioned "nordic countries", in reality only Finland tried a small UBI experiment that failed.
  - Erlich_Bachman 6y ago
    To "qualify" you basically have to come in to the office and claim that you have problems paying your bills or finding a job. So in all practical meanings, it is exactly like UBI, there is no reason to think that if the name itself would change, there would be any difference in the outcome.
    - 6y ago
appleflaxen 6y ago
> Carbon taxes unquestionably fall hardest on the poor the central point of your argument is flawed: the rich use orders of magnitude more carbon than the poor do. further: even if it were true, the goal of a carbon tax is not to be progressive, but to disincentivize fossil fuel production, and to drive behavior toward less harmful alternatives.
- read_if_gay_ 6y ago
  The central point is that the rich can also afford to pay for their supposed “orders of magnitude more carbon”.
  - xorfish 6y ago
    They can do that with other taxes. I don't see the point here. If we take a flat percentage of the spending and give everyone the same fixed amount, poorer people will profit more than rich people.
    - read_if_gay_ 6y ago
      If you take a flat percentage small enough that poor people can afford it it's not even going to be close to enough for UBI. Sure poor people will profit more (if you assume they have a smaller CO2 footprint), but only at a scale of like a couple bucks.
- othello 6y ago
  The impact of a tax is measured as a share of your income - if a tax represents a growing share of your income as you grow richer, it’s called progressive, otherwise it’s regressive (ie falls harder on the poor). This is the case for consumption taxes in general and carbon taxation in particular. This is not contradictory with the fact that the top income decile emits more per capita in absolute than the lowest one. This is especially manifest for gasoline consumption: richer households consume significantly more of it, but it represents less than 2-3% of their income, while it can reach more than 10% for poorer households. Indeed, this can and should be offset with a full redistribution of the tax proceeds - either flat or targeted at lower income households - to compensate the inherent regressivity of carbon taxation. Source: my PhD was on the distributional consequences of carbon pricing.
netcan 6y ago
Agreed on the framing, coupling and on carbon tax generally. Carbon taxes are a sort of economic theory gone rogue as it hits the political scene. I am extremely frustrated that the green side of politics is pushing this so hard. It's a dead end. Disagree totally on UBI. A rational UBI plan would recover 25%-50% of the UBI somehow. Income tax, a VAT or other mechanism. In addition, a UBI takes pressure and saves costs of other social programs. Directly reduce poverty. Have less poverty. Spend less on other poverty reduction programs. There is also a strong "stimulus" effect. UBI generates economic activity. That get taxed. Government revenue increases. Considering the benefits, I think it's a no-brainer for countries with a strong enough economy to support it. A lot of the benefits are unknown, but I suspect some of the biggest wins will be in some of the most intractable problem areas. A big one currently is the town/city dichotomy. Successful cities are very successful. High salaries. Career opportunities. Low unemployment. Unfortunately, much of that is eaten up by inflation local to these cities. UBI is geo-agnostic income. The effects on cheap, lower income areas could be very profound. Bear in mind that this problem is a graveyard of failed policies. A lot has been tried. Little has worked. This has much better odds.
- fsloth 6y ago
  "In addition, a UBI takes pressure and saves costs of other social programs. " I would go as far and say that in the optimal case UBI would replace other social programs.
  - dalbasal 6y ago
    Some savings are automatic. If a social program targets low income thresholds, and UBI raises some people above that threshold then fewer people draw on it. It costs less.
- philwelch 6y ago
  > Disagree totally on UBI. A rational UBI plan would recover 25%-50% of the UBI somehow. Fine. UBI of $1000/mo for 200 million people (2/3 of US population) costs over $2 trillion per year. Recover half of it and that’s still net $1 trillion per year. That’s more than 1/3 of the current federal budget. And there is no possible way that it replaces that much in existing spending.
newyankee 6y ago
Honestly only way to address this is more intrusive data collection, so like the first X no of essentials you purchase will not have carbon tax (based on sustainable lifestyle calculations) while everything thereafter will be have it. It could be something like a tax deduction i presume ?
xorfish 6y ago
Where do you get the unquestionably knowledge, that the poor will suffer the most from a carbon tax?
- mac01021 6y ago
  Well, they _do_ if the tax is not coupled with a dividend. To a fist approximation, the carbon tax you pay will be a fixed fraction of all the money you spend in daily life. Poor people spend essentially all their income every month. The better off you are, the lower a fraction of your income you have to spend each month. So a poor person will pay X% of their income, while a well-paid software professional might pay X% of 25% of her income. That's regressive. But a carbon fee & dividend, taken as a whole, is progressive, rather than regressive, because the poor receive a dividend in excess of the fee they pay, while the wealthy pay more fees but receive the same dividend.
fullstackchris 6y ago
> Carbon taxes unquestionably fall hardest on the poor what? how? if we're talking about the real poor, they typically don't even have a car, take public transportation, or even walk. meanwhile the very wealthy have private jets or yachts and would be paying a significant carbon tax when using those. so I'm genuinely curious how you got to > Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.
Aachen 6y ago
> Carbon taxes unquestionably fall hardest on the poor, Just last week I read an article about the wealthiest 10% causing 50% of the emissions or some similar figure. It's well known that richer countries pollute huge amounts compared to developing ones, but within a country I think it was also shown and seems to make intuitive sense. > Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich. Since when are buses and trains more carbon intensive than cars and jets? Or bulk products versus luxury, perhaps even custom ones? Plus that poor people don't have the time to go on holiday in Fiji for two weeks every year (exceptionally so in the USA with no minimum leave).
sobellian 6y ago
> Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally. Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich. That's exactly why we would want to link it with a transfer like UBI. If UBI requires too much cashflow for your taste, we could always use an expansion of EITC instead. If tax incidence on unemployed is too worrisome, then we can start shifting the EITC more towards a regular NIT. And with due respect for your best friend, the consensus is overwhelming among prominent economists that a carbon tax is fundamentally a good idea: - http://www.igmchicago.org/surveys/carbon-tax/ http://www.igmchicago.org/surveys/carbon-tax/ - http://www.igmchicago.org/surveys/carbon-taxes-ii/ http://www.igmchicago.org/surveys/carbon-taxes-ii/

by laingc 6y ago

antris 6y ago

Quite bold statements there without linking to any sources. "I won’t pretend to be an expert" Yeah, you definitely shouldn't. Also, you are missing the target on the parent comments argument. The carbon tax wouldn't affect the poor as much because the UBI is there to compensate for it, that's kind of the whole point. There's nothing about being poor that forces you to emit more carbon when compared to other people, as far as I know.

mjburgess 6y ago
1000 USD / mo / pp for the US is 12k/yr * 300m ie., c. 4 Trillion USD / yr or c. 20% of GDP (20 T) The total amount taxed in the US is already at that level (4T). For the carbon tax to raise 20% of GDP, it would need to raise as much as all present taxes do (income, sales, etc.). Levying that much on consumption (ie., obtaining the present total amount of tax merely from products people buy) would raise prices catastrophically.
- antris 6y ago
  Back of the napkin calculation is not a source. Economy is a bit more complex. edit: Imagine being downvoted for asking for a legitimate source on HN. Because rejecting UBI by making a simple multiplication is a sufficient explanation instead of researching all the secondary effects that a UBI would bring. Yeah, we've solved it there, I guess! Economists should go find some real jobs /s
- Taek 6y ago
  The price increases would be offset by the UBI. It's zero sum at an aggregate level.
- qqqwerty 6y ago
  Only about 30-40 million people would likely net extra income with a UBI. i.e. If you increase my income taxes by $1000 but then give me a $1000 UBI check, its a wash. For some reason folks struggle to wrap their head around that part. Which is why I think a negative income tax is better mechanism.
  - distances 6y ago
    Wouldn't negative tax mean that social programs would still be needed almost in the current scale to account for people with no income?
- leothecool 6y ago
  Wait, so my taxes would only double? Not being sarcastic at all: this makes UBI sound possible even without a carbon tax. The top bracket would still be lower than what it was in 1960.
  - mjburgess 6y ago
    Not quite. The tax take would double from a consumption tax. Total retail sales (https://www.statista.com/statistics/443495/total-us-retail-sales/ https://www.statista.com/statistics/443495/total-us-retail-s...) is c. 6T. Assuming that most of the 4T comes from taxing the activity represented by retail sales (a very safe bet), you need to get most of 4T from 6T. Ie., you're basically doubling the prices of retail goods -- including food.
yokaze 6y ago
> There's nothing about being poor that forces you to emit more carbon when compared to other people, as far as I know. Being poor means having less or no choices. Low income, no or negative capital. You practically have to go with the cheapest at the moment, even if it is more expensive in the long run. So, a low upfront cost gasoline car Vs a more expensive electric car with potential lower TCO. And that doesn't account for the fact that they have no discretionary spending. If everything becomes more expensive, the rich person can simply buy less. I still think it's a sensible idea, simply because the currently socialised costs (co2 emissions & poverty related ones) become explicit.
- antris 6y ago
  Cheapest option is to not buy a car and or go by public transport or a bike. And the reason why gasoline cars are as affordable as they are now is that the carbon tax is not here and cars are heavily subsidized in general. Carbon tax isn't even really a tax, it's more akin to removing a subsidy (you cannot pollute for free anymore and make someone else pay the costs)

baq 6y ago

OP may have mixed the idea of carbon dividend into UBI which the poor would get more of than they’d pay in carbon taxes.

Ottolay 6y ago

This is a red herring that keeps being brought up with respect to UBI way too often. "Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally." Yes, but rich people consume and release carbon at a much higher rate than poor people. As a result, rich people would pay into consumption taxes/carbon taxes much more than they would get back in a flat cash payment funded by such means.

simonebrunozzi 6y ago
Absolutely wrong. Example: Jeff Bezos, worth $150B, or the same worth of approx. 1M Americans, does not consume nor release carbon 1M times more than an average American. Proportionally to his wealth, he's much less affected by a carbon tax. For the same reason, someone below the average wealth and/or income is heavily affected by a carbon tax.
- garmaine 6y ago
  That’s not what’s being argued. Rather, the poor are going to pay less in carbon taxes than they receive in UBI. This is simply a matter of how power laws and averages work.
- namdnay 6y ago
  And he will get the same UBI as any other american, so proportionally to his wealth he's much less affected by the UBI stimulus
- diffeomorphism 6y ago
  Also absolutely wrong. The fact that it stops scaling at millionaires would only be worthwhile discussing if a large share of the population were billionaires. "This tax works great for 99% of the population, but there are some billionaires that should be taxed higher" is more of an endorsement than a counterargument.
- deleted 6y ago
  [deleted]
- LordDragonfang 6y ago

yinyang_in 6y ago

Hi, I read once somewhere about it that, if (big if), if we make large transaction to make digital and tax of digital transaction like transaction fees/banking fees, for every transaction we make there is x% of tax is taken by government. It may cause people to not go digital but encourage black money, but if government i.e basically us make a decision that's(non digital translation) are not legal in country. What do you think about it? I see black money, barter system creeping in but in bigger picture what do you think about it This form of tax will take people with more spending to tax more, so people who live beyond their means will be taxed more and poor people will be taxed less.

lambdasquirrel 6y ago

If we're going to have an academic debate, then we should have an academic debate. One academic economist doesn't make a debate. I mean no disrespect to you either but I was friends with a Ph.D at Intel who said the economics were all in favor of general-purpose computing, and therefore, realtime raytracing was the way to go. Embarrassment was on me. I parroted his lines for quite a while. None of us are infallible. Having a Ph.D merely means you know how to do research, in a narrow, focused area. If we are going to have an academic argument – and we really should, if we aren't to just be blabbering off here – we need to see some numbers. We need to know how they are calculated. What's the carbon footprint of these Mexican laborers getting to work 3 to a small-cab truck, or on bicycle, or on BART in the wee morning? And have that compared to the guy in Hamptons with his giant 22-room house here, and other houses elsewhere. Maybe the Mexican guy's taxes will be close to mine. More than is comfortable. That is fine. Carbon taxes don't have to be the only source of income for the government. But until we can see the actual curves, and the total output per segment, etc., we can't actually crunch out what an effective policy is, and we're writing off what's arguably necessary if we're to fix the problem, because we're probably going to have a hard time cutting back emissions until we associate an economic cost to them.

Alupis 6y ago
So, what happens if this carbon tax works like I suspect we want it to? Doesn't that mean there will be less carbon tax revenue, because we've compelled companies to be more green? Who pays for the UBI then?
- sleepychu 6y ago
  The change will be incremental, policy makers will have time to see that the funding is evaporating and identify alternative sources. For example, increased GDP from an economy no longer plagued by pollution and the devastating weather events caused by climate change.
  - zpeti 6y ago
    Right, so you’ve just admitted your argument is flawed, it won’t work in the long run, and “it’s complicated”. But yeah, sounds absolutely perfect, carbon tax plus ubi. Problem is that’s it, it sounds great.

fsloth 6y ago

"With respect to UBI, the amount of revenue needed to sustain anything other than a token payment is ... orders of magnitude more than could ever be raised by any realistic tax, actually, but that’s rather beside the point." I disagree strongly that the cost for UBI would be untenable in the general context. For example nordic countries already have UBI in all but name due to all the support the society gives to those in need. We just don't call it UBI because it's split to several parts. And there is political opposition of course based on the strawman that UBI "would make people lazy". Maybe in some "other" cultures it would (I have no idea where, though), but not in the nordics. So no those in need are forced to go humbly from government desk to the next. "It’s fine to like UBI .. but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence" Disagree again. Poverty reduces peoples life outcomes. Having a scheme that reduces generational poverty will improve educational results, thus increasing life time wages, thus increasing consumption and taxes. " there’s certainly no reason to link them as part of a single policy." Strongly agreed! UBI and carbon tax should have nothing to do with each other. (Sorry, I cropped a bit your comment.)

kmlx 6y ago
> For example nordic countries already have UBI in all but name due to all the support the society gives to those in need. We just don't call it UBI because it's split to several parts. that's basic "social welfare". it's not really universal, it's more for those who qualify. in certain countries you can even opt out of this safety net. you mentioned "nordic countries", in reality only Finland tried a small UBI experiment that failed.
- Erlich_Bachman 6y ago
  To "qualify" you basically have to come in to the office and claim that you have problems paying your bills or finding a job. So in all practical meanings, it is exactly like UBI, there is no reason to think that if the name itself would change, there would be any difference in the outcome.
  - 6y ago

appleflaxen 6y ago

> Carbon taxes unquestionably fall hardest on the poor the central point of your argument is flawed: the rich use orders of magnitude more carbon than the poor do. further: even if it were true, the goal of a carbon tax is not to be progressive, but to disincentivize fossil fuel production, and to drive behavior toward less harmful alternatives.

read_if_gay_ 6y ago
The central point is that the rich can also afford to pay for their supposed “orders of magnitude more carbon”.
- xorfish 6y ago
  They can do that with other taxes. I don't see the point here. If we take a flat percentage of the spending and give everyone the same fixed amount, poorer people will profit more than rich people.
  - read_if_gay_ 6y ago
    If you take a flat percentage small enough that poor people can afford it it's not even going to be close to enough for UBI. Sure poor people will profit more (if you assume they have a smaller CO2 footprint), but only at a scale of like a couple bucks.
othello 6y ago
The impact of a tax is measured as a share of your income - if a tax represents a growing share of your income as you grow richer, it’s called progressive, otherwise it’s regressive (ie falls harder on the poor). This is the case for consumption taxes in general and carbon taxation in particular. This is not contradictory with the fact that the top income decile emits more per capita in absolute than the lowest one. This is especially manifest for gasoline consumption: richer households consume significantly more of it, but it represents less than 2-3% of their income, while it can reach more than 10% for poorer households. Indeed, this can and should be offset with a full redistribution of the tax proceeds - either flat or targeted at lower income households - to compensate the inherent regressivity of carbon taxation. Source: my PhD was on the distributional consequences of carbon pricing.

netcan 6y ago

Agreed on the framing, coupling and on carbon tax generally. Carbon taxes are a sort of economic theory gone rogue as it hits the political scene. I am extremely frustrated that the green side of politics is pushing this so hard. It's a dead end. Disagree totally on UBI. A rational UBI plan would recover 25%-50% of the UBI somehow. Income tax, a VAT or other mechanism. In addition, a UBI takes pressure and saves costs of other social programs. Directly reduce poverty. Have less poverty. Spend less on other poverty reduction programs. There is also a strong "stimulus" effect. UBI generates economic activity. That get taxed. Government revenue increases. Considering the benefits, I think it's a no-brainer for countries with a strong enough economy to support it. A lot of the benefits are unknown, but I suspect some of the biggest wins will be in some of the most intractable problem areas. A big one currently is the town/city dichotomy. Successful cities are very successful. High salaries. Career opportunities. Low unemployment. Unfortunately, much of that is eaten up by inflation local to these cities. UBI is geo-agnostic income. The effects on cheap, lower income areas could be very profound. Bear in mind that this problem is a graveyard of failed policies. A lot has been tried. Little has worked. This has much better odds.

fsloth 6y ago
"In addition, a UBI takes pressure and saves costs of other social programs. " I would go as far and say that in the optimal case UBI would replace other social programs.
- dalbasal 6y ago
  Some savings are automatic. If a social program targets low income thresholds, and UBI raises some people above that threshold then fewer people draw on it. It costs less.
philwelch 6y ago
> Disagree totally on UBI. A rational UBI plan would recover 25%-50% of the UBI somehow. Fine. UBI of $1000/mo for 200 million people (2/3 of US population) costs over $2 trillion per year. Recover half of it and that’s still net $1 trillion per year. That’s more than 1/3 of the current federal budget. And there is no possible way that it replaces that much in existing spending.

newyankee 6y ago

Honestly only way to address this is more intrusive data collection, so like the first X no of essentials you purchase will not have carbon tax (based on sustainable lifestyle calculations) while everything thereafter will be have it. It could be something like a tax deduction i presume ?

xorfish 6y ago

Where do you get the unquestionably knowledge, that the poor will suffer the most from a carbon tax?

mac01021 6y ago
Well, they _do_ if the tax is not coupled with a dividend. To a fist approximation, the carbon tax you pay will be a fixed fraction of all the money you spend in daily life. Poor people spend essentially all their income every month. The better off you are, the lower a fraction of your income you have to spend each month. So a poor person will pay X% of their income, while a well-paid software professional might pay X% of 25% of her income. That's regressive. But a carbon fee & dividend, taken as a whole, is progressive, rather than regressive, because the poor receive a dividend in excess of the fee they pay, while the wealthy pay more fees but receive the same dividend.

fullstackchris 6y ago

> Carbon taxes unquestionably fall hardest on the poor what? how? if we're talking about the real poor, they typically don't even have a car, take public transportation, or even walk. meanwhile the very wealthy have private jets or yachts and would be paying a significant carbon tax when using those. so I'm genuinely curious how you got to > Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.

Aachen 6y ago

> Carbon taxes unquestionably fall hardest on the poor, Just last week I read an article about the wealthiest 10% causing 50% of the emissions or some similar figure. It's well known that richer countries pollute huge amounts compared to developing ones, but within a country I think it was also shown and seems to make intuitive sense. > Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich. Since when are buses and trains more carbon intensive than cars and jets? Or bulk products versus luxury, perhaps even custom ones? Plus that poor people don't have the time to go on holiday in Fiji for two weeks every year (exceptionally so in the USA with no minimum leave).

sobellian 6y ago

> Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally. Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich. That's exactly why we would want to link it with a transfer like UBI. If UBI requires too much cashflow for your taste, we could always use an expansion of EITC instead. If tax incidence on unemployed is too worrisome, then we can start shifting the EITC more towards a regular NIT. And with due respect for your best friend, the consensus is overwhelming among prominent economists that a carbon tax is fundamentally a good idea: - http://www.igmchicago.org/surveys/carbon-tax/ http://www.igmchicago.org/surveys/carbon-tax/ - http://www.igmchicago.org/surveys/carbon-taxes-ii/ http://www.igmchicago.org/surveys/carbon-taxes-ii/