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> Why? If taxes are going to have side effects anyway, I think we should try to make those effects positive instead of negative. Simply put: it’s a moral hazar

by SllX 4y ago

> Why? If taxes are going to have side effects anyway, I think we should try to make those effects positive instead of negative. Simply put: it’s a moral hazard. When the goal of the tax is in service to something other than the cost of government, then the tax rate can be arbitrary, and manipulated to the benefit of those in political favor. That sort of arbitrariness is intolerable in a free and just society as we should aspire to be. >> Regardless of reason, taxation is a taking of assets from its owners, and this is a moral compromise we tolerate in service of having a government at all. > I don't think I agree with that. > For example, I also think we should have a (revenue neutral) carbon tax. Part of the tax's purpose would indeed be to fund the government, but the other purpose would be to make people pay for the actual social cost of emitting carbon into the atmosphere, as opposed to passing them on to the broader public. This allows the free market to work properly. You are free to disagree, but what is the purpose of the disagreement here? It is possible to both recognize taxes as both a taking of assets (often cash, but historically could be anything) and a necessity. You can view this on your own paycheck: every single dollar that goes to your government is a dollar that you personally earned and was taken from you (“withheld”) by your employer and paid to your government. You have some influence over how those dollars are then expensed by your government, by only to the extent allowed by the law through a power-sharing agreement (“the Constitution”, both Federal and your State’s). The larger the government, the less influence you have, and the more likely a higher percentage of the earnings which were taken from you will go to benefit folks you would rather it didn’t (“wasted”). But you raise a good point about the side effects: we are going to have taxes anyway, and the side effects are going to matter in the discussion. Where they matter though is not in the purpose of the tax—that is and should remain to cover the cost of government—it matters in which taxes are implemented to cover the cost of government. As long as that remains the basis, there is much room for improvement in the way we levy taxes.

Wowfunhappy 4y ago
> You are free to disagree, but what is the purpose of the disagreement here? Because in the case of a carbon tax, the government isn't taking assets that are rightfully yours; they're taking assets that rightfully belong to the public. Let's say that I bulldoze your house in order to expand the size of my factory. The factory might generate lots of additional revenue, but that revenue would not be rightfully mine. Now let's say that instead, I dump refuse from my factory into a river that runs through both of our properties. The refuse flows downstream and ruins your drinking water. I would argue that again, the revenue from my factory is not rightfully mine. That's still pretty obvious. But now let's say that instead of polluting the river, I pollute the air with greenhouse gases. Long-term, this is also going to be detrimental to your property, such as by increasing the likelihood of extreme weather. And so some portion of the revenue I generate by releasing greenhouse gasses does not actually belong to me. The government should take that revenue, both to allow the free market to correct for those social costs, and to compensate those affected.
- ItsMonkk 4y ago
  A carbon tax is correcting the negative externality of using the carbon. So you are paying for the harm that you are doing to society. In that same exact way, a land value tax is correcting the capture of the positive externality that is coming from your neighbors for your particular location because of your monopoly over it.
- SllX 4y ago
  Ah, that’s a misunderstanding. Taxes are a cost from a business accounting perspective. Costs are not borne by the business but paid for by their customers in a manner which is usually obscured to them. A “carbon” tax would effectively be a tax on all goods and services that use energy (all of them). Now my understanding (when I’ve raised this cost of governance issue with advocates prior anyway) of a lot of carbon tax proposals is that the taxes paid would be remitted back to taxpayers or citizens in some way in a kind of Robin Hood-like manner rather than actually used to cover the cost of government, but this doesn’t actually accomplish anything and I disagree with that kind of scheme on prudential grounds (inappropriate use of tax authority). In any case it would be cash seized from someone who earned it first. A power plant doesn’t emit hydro-carbons needlessly, it emits them as a function of a customer downstream paying for it: to power your refrigerator or to pay for the manufacture of the phone you purchased. Whether you are levying the tax against the business operating the plant, the customer at the point of sale or any and all of the intermediaries, what you are effectively doing is raising business costs no matter how you phrase it or rhetorically justify it. This informs the final product and service price, so if costs go up including taxes, you should also expect prices to go up.
  - Wowfunhappy 4y ago
    > A “carbon” tax would effectively be a tax on all goods and services that use energy (all of them). Unless one company could find a way to produce goods with less energy than their competitors, or obtain its energy from cleaner sources, perhaps by investing in solar power. This would of course incentivize competitors to do the same. Yes, it would cause prices to go up, but those prices would reflect the actual cost of the good. As you noted, you could offset the price increases by redistributing the tax revenue to the public. This redistribution doesn't make the tax pointless: you're giving a discount to individuals who make greener choices. People who pollute more (whether directly or indirectly via the products they buy) will pay more of the tax but not receive more back. (This reasoning can apply to a LVT as well, but I prefer the carbon example because I think it's more clear-cut. Clearly, no one person owns the air. People do own land, so I'm more conflicted.)

by SllX 4y ago

Wowfunhappy 4y ago

> You are free to disagree, but what is the purpose of the disagreement here? Because in the case of a carbon tax, the government isn't taking assets that are rightfully yours; they're taking assets that rightfully belong to the public. Let's say that I bulldoze your house in order to expand the size of my factory. The factory might generate lots of additional revenue, but that revenue would not be rightfully mine. Now let's say that instead, I dump refuse from my factory into a river that runs through both of our properties. The refuse flows downstream and ruins your drinking water. I would argue that again, the revenue from my factory is not rightfully mine. That's still pretty obvious. But now let's say that instead of polluting the river, I pollute the air with greenhouse gases. Long-term, this is also going to be detrimental to your property, such as by increasing the likelihood of extreme weather. And so some portion of the revenue I generate by releasing greenhouse gasses does not actually belong to me. The government should take that revenue, both to allow the free market to correct for those social costs, and to compensate those affected.

ItsMonkk 4y ago
A carbon tax is correcting the negative externality of using the carbon. So you are paying for the harm that you are doing to society. In that same exact way, a land value tax is correcting the capture of the positive externality that is coming from your neighbors for your particular location because of your monopoly over it.
SllX 4y ago
Ah, that’s a misunderstanding. Taxes are a cost from a business accounting perspective. Costs are not borne by the business but paid for by their customers in a manner which is usually obscured to them. A “carbon” tax would effectively be a tax on all goods and services that use energy (all of them). Now my understanding (when I’ve raised this cost of governance issue with advocates prior anyway) of a lot of carbon tax proposals is that the taxes paid would be remitted back to taxpayers or citizens in some way in a kind of Robin Hood-like manner rather than actually used to cover the cost of government, but this doesn’t actually accomplish anything and I disagree with that kind of scheme on prudential grounds (inappropriate use of tax authority). In any case it would be cash seized from someone who earned it first. A power plant doesn’t emit hydro-carbons needlessly, it emits them as a function of a customer downstream paying for it: to power your refrigerator or to pay for the manufacture of the phone you purchased. Whether you are levying the tax against the business operating the plant, the customer at the point of sale or any and all of the intermediaries, what you are effectively doing is raising business costs no matter how you phrase it or rhetorically justify it. This informs the final product and service price, so if costs go up including taxes, you should also expect prices to go up.
- Wowfunhappy 4y ago
  > A “carbon” tax would effectively be a tax on all goods and services that use energy (all of them). Unless one company could find a way to produce goods with less energy than their competitors, or obtain its energy from cleaner sources, perhaps by investing in solar power. This would of course incentivize competitors to do the same. Yes, it would cause prices to go up, but those prices would reflect the actual cost of the good. As you noted, you could offset the price increases by redistributing the tax revenue to the public. This redistribution doesn't make the tax pointless: you're giving a discount to individuals who make greener choices. People who pollute more (whether directly or indirectly via the products they buy) will pay more of the tax but not receive more back. (This reasoning can apply to a LVT as well, but I prefer the carbon example because I think it's more clear-cut. Clearly, no one person owns the air. People do own land, so I'm more conflicted.)