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Sorry, a carbon tax will do absolutely nothing for the environment - the money will just go into the general fund, that is, the same slush fund that politicians

Sorry, a carbon tax will do absolutely nothing for the environment - the money will just go into the general fund, that is, the same slush fund that politicians already use for buying votes and paying off contributors to their re-election fund.

rdl 14y ago
Taxes both raise revenue and "distort" the economy. In some cases, these distortions are accidental (no one really wants capital investment reduced, which is the effect of even a 0.1% capital gains tax; they just consider the revenue raised to be more important than the distortion). In some cases, the distortions are themselves the goal. Cigarette taxes are a great example -- I think the economy overall would be better off if there were 0% revenue on a $50/pack cigarette tax, as it would save health care and other costs far higher than the revenue on a $0.50/pack cigarette tax. Or, a local tax per-bag of trash produced, in excess of direct disposal taxes, in an attempt to capture the external costs of waste. (in Zurich, I think the bags are something like $5 each) Carbon taxes could be either, but a steadily increasing carbon tax is much more like a cigarette tax than a capital gains tax.
philwelch 14y ago
Taxing something makes it more expensive, which reduces it. First law of economics: people respond to incentives.
- patrickgzill 14y ago
  Or drives it to black market. Canada implemented a VAT-like GST - in a country of 30 million, the first year it was implemented an estimated $1 billion underground (non-GST-paying) economy was formed.
  - philwelch 14y ago
    Only if the costs of operating a black market are less than the costs of the tax. Coal and petroleum aren't like liquor and cocaine, though. It would be massively impractical to set up a black market for energy.
    - rdl 14y ago
      The closest thing is dodgy energy accounting -- making high energy-embodied or pollution-intensive products in places outside the regime, like Chinese steel mills.

rdl 14y ago

Taxes both raise revenue and "distort" the economy. In some cases, these distortions are accidental (no one really wants capital investment reduced, which is the effect of even a 0.1% capital gains tax; they just consider the revenue raised to be more important than the distortion). In some cases, the distortions are themselves the goal. Cigarette taxes are a great example -- I think the economy overall would be better off if there were 0% revenue on a $50/pack cigarette tax, as it would save health care and other costs far higher than the revenue on a $0.50/pack cigarette tax. Or, a local tax per-bag of trash produced, in excess of direct disposal taxes, in an attempt to capture the external costs of waste. (in Zurich, I think the bags are something like $5 each) Carbon taxes could be either, but a steadily increasing carbon tax is much more like a cigarette tax than a capital gains tax.

philwelch 14y ago

Taxing something makes it more expensive, which reduces it. First law of economics: people respond to incentives.

patrickgzill 14y ago
Or drives it to black market. Canada implemented a VAT-like GST - in a country of 30 million, the first year it was implemented an estimated $1 billion underground (non-GST-paying) economy was formed.
- philwelch 14y ago
  Only if the costs of operating a black market are less than the costs of the tax. Coal and petroleum aren't like liquor and cocaine, though. It would be massively impractical to set up a black market for energy.
  - rdl 14y ago
    The closest thing is dodgy energy accounting -- making high energy-embodied or pollution-intensive products in places outside the regime, like Chinese steel mills.