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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

by 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.)
- SllX 4y ago
  > 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. Sure. Let’s take that solar power investment: under your proposed regime, the cost of the supplies and materials and electronics of the R&D employees would be bear a carbon tax. The electricity to power the lightning and electronics would beat a carbon tax. Any transport they use will bear a carbon tax. The food they eat will bear a carbon tax. The mines the materials for the panels will bear a carbon tax. The transport of the materials will bear a carbon tax. The equipment for extraction will bear a carbon tax. The factories which produce the panels will bear a carbon tax. The intermediaries that ship and handle the panels will bear a carbon tax. The infrastructure to connect it to the grid will bear a carbon tax. And I’m sure I’m leaving out several thousand items, but that’s probably why the serious proposals say to just do it at the plants and refineries, I.e. increase the cost of energy directly. Taxes are not a cost in the way supplies and materials are and a carbon tax doesn’t make the “cost of the good” more real, just higher. They are a fiat cost, hence the need to tie to something real: the cost of governance. Consumers do not accept lightly increases in their cost of living, as you can see in the present moment with the current price of fuel in the US and the likely parties to suffer in upcoming elections.
  - Wowfunhappy 4y ago
    The transportation could be done via electric vehicles. The lighting and electronics could itself be powered by greener sources. Maybe not for the first new solar farm constructed, but over time as the infrastructure was built out. And the tax would incentivize the building of that infrastructure. Let me ask: do you think it's possible in a literal sense for society to emit greenhouse gases? If it's not possible, your argument makes sense to me. But if it is possible, we should financially reward people who make greener choices.
    - SllX 4y ago
      > The transportation could be done via electric vehicles. The lighting and electronics could itself be powered by greener sources. Maybe not for the first new solar farm constructed, but over time as the infrastructure was built out. And the tax would incentivize the building of that infrastructure. Every single thing you just listed would take energy to produce and would bear a carbon tax because a carbon tax is really just an energy tax. The electric vehicles need batteries, the batteries need lithium, and the lithium has to come out of the ground. This results in a product with much more mass than your typical ICE, thus has more energy put into its production, but to offset this the electricity can theoretically come from some solar farm in the Mojave desert. In practice it probably comes from a gas fired plant, but that is still a lot better than if it were to come from a coal powered plant (and sometimes it does). Everything we do by living has an impact on the planet. Actually to be more exact anything any living creature does has an impact on the planet, but we’re the only species that thinks on a planetary scale (except maybe birds, I’m sure there’s a fun philosophical discussion there but we’ll have to table it) and therefore care about this ecosystem we have conceptualized as a planet. So when I eat some beans or drink milk and or a cow eats some grass or “feed”, we both emit a GHG with a global warming potential of 27-30 over 100 years. You should be happy to note that as a responsible citizen of this planet, I have omitted both beans and milk from my diet. Unfortunately my hypothetical methane account is probably overdrawn on account of my love of steak as my primary source of protein. No. We cannot live without waste as a necessary product of living, and since there’s a lot of us, we waste a lot of energy. What we can do is get a lot more efficient with our energy usage and reduce the total amount of waste, but we will continue to be GHG emitters for as long as we have civilization. Either we find some way to get the planet to absorb more of our emissions or we naturally die off until we reach an equilibrium with the planet. That could be billions of us or it could be zero of us. I’m unconvinced tax policy will be our silver bullet, nor will cronyism. > we should financially reward people who make greener choices. Which brings me to my final point. If you mean this in a private market sense, that’s fine. If you mean this as an extension of tax policy and the course of government business, this is called cronyism—the government picking winners and losers and is a fine example of why our tax code is already so complex. We have plenty of that already, and I would like to see less to the point that it approaches or eventually achieves zero but I’m not holding my breath.
yellowapple 4y ago
> Costs are not borne by the business but paid for by their customers in a manner which is usually obscured to them. Only if the supply of the thing being taxed is elastic. The supply of land is inelastic, so (returning to the original topic) there is no way to price LVT into downstream rents; attempting to do so would mean pricing the thing above the value set by its demand, which would mean even less profit.
- SllX 4y ago
  Yes but there is a way to fire anyone who sets an arbitrarily high LVT, which is why the OP at the root of this comment thread called a very high LVT a politically unserious proposal (emphasis mine) and I agree with that. Property taxes do go into the cost of business by the way; and that would be true for an LVT as well. The land itself may be inelastic but that isn’t necessarily true of the products and services that are produced on it.
  - yellowapple 4y ago
    > Yes but there is a way to fire anyone who sets an arbitrarily high LVT Yes but that requires a majority to want to abolish said LVT, whereas the majority would stand to benefit from an LVT as close to 100% (of economic rent) as possible. > Property taxes do go into the cost of business by the way; and that would be true for an LVT as well. Most businesses (last I checked) lease from commercial landlords, which means property taxes and LVT would both be part of rent - which, again, can't be raised to account for LVT without violating supply v. demand constraints and hurting profits as a result. Even for those businesses which do own land outright, land prices are also currently a factor in the cost of business; they're no worse off by replacing a giant lump sum with LVT.
    - SllX 4y ago
      > Yes but that requires a majority to want to abolish said LVT, whereas the majority would stand to benefit from an LVT as close to 100% (of economic rent) as possible. I mean as close to 100% is probably like maybe 4-5% at most, if the LVT on the land and the property tax on the structure were added up to that going by this Strongtown article someone linked me somewhere in this comment chain about how some PA towns have done it. I think you’re reading me and getting the wrong idea about what it is I’m arguing against. LVT’s as a tax are okay in lieu of other taxes, provided they’re in lieu of other taxes and also the rate is not set arbitrarily high to accomplish nebulous other social goals. That last part is requirement for every sort of tax, and excessive government revenue should dollar for dollar be returned to the people it was levied from.

by SllX 4y ago

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.)

SllX 4y ago
> 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. Sure. Let’s take that solar power investment: under your proposed regime, the cost of the supplies and materials and electronics of the R&D employees would be bear a carbon tax. The electricity to power the lightning and electronics would beat a carbon tax. Any transport they use will bear a carbon tax. The food they eat will bear a carbon tax. The mines the materials for the panels will bear a carbon tax. The transport of the materials will bear a carbon tax. The equipment for extraction will bear a carbon tax. The factories which produce the panels will bear a carbon tax. The intermediaries that ship and handle the panels will bear a carbon tax. The infrastructure to connect it to the grid will bear a carbon tax. And I’m sure I’m leaving out several thousand items, but that’s probably why the serious proposals say to just do it at the plants and refineries, I.e. increase the cost of energy directly. Taxes are not a cost in the way supplies and materials are and a carbon tax doesn’t make the “cost of the good” more real, just higher. They are a fiat cost, hence the need to tie to something real: the cost of governance. Consumers do not accept lightly increases in their cost of living, as you can see in the present moment with the current price of fuel in the US and the likely parties to suffer in upcoming elections.
- Wowfunhappy 4y ago
  The transportation could be done via electric vehicles. The lighting and electronics could itself be powered by greener sources. Maybe not for the first new solar farm constructed, but over time as the infrastructure was built out. And the tax would incentivize the building of that infrastructure. Let me ask: do you think it's possible in a literal sense for society to emit greenhouse gases? If it's not possible, your argument makes sense to me. But if it is possible, we should financially reward people who make greener choices.
  - SllX 4y ago
    > The transportation could be done via electric vehicles. The lighting and electronics could itself be powered by greener sources. Maybe not for the first new solar farm constructed, but over time as the infrastructure was built out. And the tax would incentivize the building of that infrastructure. Every single thing you just listed would take energy to produce and would bear a carbon tax because a carbon tax is really just an energy tax. The electric vehicles need batteries, the batteries need lithium, and the lithium has to come out of the ground. This results in a product with much more mass than your typical ICE, thus has more energy put into its production, but to offset this the electricity can theoretically come from some solar farm in the Mojave desert. In practice it probably comes from a gas fired plant, but that is still a lot better than if it were to come from a coal powered plant (and sometimes it does). Everything we do by living has an impact on the planet. Actually to be more exact anything any living creature does has an impact on the planet, but we’re the only species that thinks on a planetary scale (except maybe birds, I’m sure there’s a fun philosophical discussion there but we’ll have to table it) and therefore care about this ecosystem we have conceptualized as a planet. So when I eat some beans or drink milk and or a cow eats some grass or “feed”, we both emit a GHG with a global warming potential of 27-30 over 100 years. You should be happy to note that as a responsible citizen of this planet, I have omitted both beans and milk from my diet. Unfortunately my hypothetical methane account is probably overdrawn on account of my love of steak as my primary source of protein. No. We cannot live without waste as a necessary product of living, and since there’s a lot of us, we waste a lot of energy. What we can do is get a lot more efficient with our energy usage and reduce the total amount of waste, but we will continue to be GHG emitters for as long as we have civilization. Either we find some way to get the planet to absorb more of our emissions or we naturally die off until we reach an equilibrium with the planet. That could be billions of us or it could be zero of us. I’m unconvinced tax policy will be our silver bullet, nor will cronyism. > we should financially reward people who make greener choices. Which brings me to my final point. If you mean this in a private market sense, that’s fine. If you mean this as an extension of tax policy and the course of government business, this is called cronyism—the government picking winners and losers and is a fine example of why our tax code is already so complex. We have plenty of that already, and I would like to see less to the point that it approaches or eventually achieves zero but I’m not holding my breath.

yellowapple 4y ago

> Costs are not borne by the business but paid for by their customers in a manner which is usually obscured to them. Only if the supply of the thing being taxed is elastic. The supply of land is inelastic, so (returning to the original topic) there is no way to price LVT into downstream rents; attempting to do so would mean pricing the thing above the value set by its demand, which would mean even less profit.

SllX 4y ago
Yes but there is a way to fire anyone who sets an arbitrarily high LVT, which is why the OP at the root of this comment thread called a very high LVT a politically unserious proposal (emphasis mine) and I agree with that. Property taxes do go into the cost of business by the way; and that would be true for an LVT as well. The land itself may be inelastic but that isn’t necessarily true of the products and services that are produced on it.
- yellowapple 4y ago
  > Yes but there is a way to fire anyone who sets an arbitrarily high LVT Yes but that requires a majority to want to abolish said LVT, whereas the majority would stand to benefit from an LVT as close to 100% (of economic rent) as possible. > Property taxes do go into the cost of business by the way; and that would be true for an LVT as well. Most businesses (last I checked) lease from commercial landlords, which means property taxes and LVT would both be part of rent - which, again, can't be raised to account for LVT without violating supply v. demand constraints and hurting profits as a result. Even for those businesses which do own land outright, land prices are also currently a factor in the cost of business; they're no worse off by replacing a giant lump sum with LVT.
  - SllX 4y ago
    > Yes but that requires a majority to want to abolish said LVT, whereas the majority would stand to benefit from an LVT as close to 100% (of economic rent) as possible. I mean as close to 100% is probably like maybe 4-5% at most, if the LVT on the land and the property tax on the structure were added up to that going by this Strongtown article someone linked me somewhere in this comment chain about how some PA towns have done it. I think you’re reading me and getting the wrong idea about what it is I’m arguing against. LVT’s as a tax are okay in lieu of other taxes, provided they’re in lieu of other taxes and also the rate is not set arbitrarily high to accomplish nebulous other social goals. That last part is requirement for every sort of tax, and excessive government revenue should dollar for dollar be returned to the people it was levied from.