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I'm not entirely sure I understand you. Are you saying that sales taxes can be reduced to compensate for carbon taxes? If so that may also have side effects as
by user_7832 3y ago
I'm not entirely sure I understand you. Are you saying that sales taxes can be reduced to compensate for carbon taxes?
If so that may also have side effects as sales tax can be distortionary and may be more difficult to control (as you'd need to change sales taxes whenever you change carbon taxes.) Not saying it's necessarily bad, it'll just be important to take care of side effects to make it a good idea.
- AuthorizedCust 3y agoYes, reduce sales tax enough to offset new revenues from a carbon tax. This may start a philosophical shift from the type of tax to the total revenue needed, which I think would be helpful. That would give increased room for flexibility in the form of taxation, which might give easier paths to address legitimate concerns with tax types.