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Internalizing negative externalities through taxation is literally Economics 101. That's not to say that that makes a carbon tax inherently a good idea (though
by tfehring 5y ago
Internalizing negative externalities through taxation is literally Economics 101. That's not to say that that makes a carbon tax inherently a good idea (though I think it is), but there's nothing economically unsound about it and there's a reason lots of economists support it.
- tppiotrowski 5y agoTaxes are taught in economics 101, but tax evasion is not: drive across state lines, shop online, under report activity, buy on the black market, etc. You need a strong enforcement mechanism in place that's often hand waived away. When I studied economics (2006) the theory was brilliant but always fell short of delivering in practice. People won't evade buying cars that produce less CO2 if they're cheaper and better than the competition. This is why I think it's more likely to align with economic theory.