TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, December 20, 2012

Why Conservatives Should Support a Carbon Tax

Case Shi-Ling Hsu (Florida State; author of The Case for a Carbon Tax) & Yoram Bauman (The 'Stand-up Economist'), Why Conservatives Should Support a Carbon Tax:

Why should conservatives support a carbon tax? Current conservative orthodoxy is that no tax is a good tax. But some are taxes less bad than others. If a carbon tax can be used to reduce other taxes, or if a carbon tax is a new source of revenues for deficit reduction instead of raising other taxes, the net economic benefits of such a swap are likely to be positive even if one believes there are no environmental benefits. Second, the alternative to a carbon tax is less efficient: federal command-and-control regulation of greenhouse gas emissions under the Clean Air Act. The Supreme Court has held that the EPA must regulate greenhouse gas emissions under the Clean Air Act, and this requirement will not be legislatively repealed unless it is replaced by something comprehensive, like a carbon tax. In short, a carbon tax is the simplest, cheapest, and least intrusive way to reduce greenhouse gas emissions, and if substituted for other taxes, can provide economic benefits to boot. A carbon tax would not only be consistent with conservative, small-government principles, but can help advance them.

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Give me a break.

"The Supreme Court has held that the EPA must regulate greenhouse gas...."
Corrected: The Court, iin crazy reasoning, held that the EPA may regulate carbon dioxide, a gas found naturally in our atmosphere.

if substituted for other taxes
Corrected: It will just be an added tax. No other taxes will go away.

"provide economic benefits to boot"
A carbon tax will create a significant cost to industry, and that cost will be reflected in higher prices and unemployment. The economy will decline.

"A carbon tax would not only be consistent with conservative, small-government principles, but can help advance them."
The authors live in a dream world. Either they've been sold a bill of goods or think conservatives are stupid...probably both.

A carbon tax does not provide real benefits. Global warming is not occuring. It would make American goods less competitive with China, India, and every other country without such a tax. This is simply another scare attempt to build government through higher taxes and more control. It is also an attempt to transfer wealth from Western nations to underachieving nations, on which there are no proposed controls.

Consider even the liberal Canadian government on this. -- Canada Drops Out Of Kyoto Protocol

To meet the targets under Kyoto for 2012 would be the equivalent of: - Either removing every car, truck, ATV, tractor, ambulance, police car and vehicle of every kind from Canadian roads - Or, closing down the entire farming and agricultural sector and cutting heat to every home, office, hospital, factory and building in Canada. The cost of not taking this type of radical and irresponsible action? The loss of thousands of jobs or the transfer of $14 BILLION from Canadian taxpayers to other countries – the equivalent of $1600 from every Canadian family — with no impact on emissions or the environment. That’s the Kyoto cost to Canadians.

What do you want to bet that the authors got a government grant for this report?

Posted by: Woody | Dec 20, 2012 10:20:37 AM

A carbon tax is the best way to discourage the use of carbon-based energy and encourage the use of available alternatives. The problem is that alternatives are not yet available. As soon as fusion power or solar biofuels (photosynthesis of liquid fuel) become viable, the carbon tax will speed the transition.

Until alternatives are ready, a carbon tax will serve mainly to collect a lot of revenue from inelastic demand for energy. People who want to spend that revenue are conveniently the strongest advocates of a carbon tax.

Posted by: AMTbuff | Dec 21, 2012 10:56:08 AM

Woody states that global warming is not occurring and his source is a link that contains zero data - just a diatribe.

The Department of Commerce recently issued a report that included input from 240 scientists from various areas across the US including NASA and the Climate Center at Texas Tech University. These experts concluded that the last decade was the warmest on record, and the problems are here now and will only increase if nothing is done.

Ireland's carbon tax is helping to reduce government debt. We could do the same. Or the US can institute a "carbon tax - 100% dividend." Under this latter approach all revenue generated by a carbon tax would be returned to US citizens on an averaged basis.

For example, if five people paid carbon taxes totaling $100, the average tax for each would be $20. This amount, $20, would be returned to each individual, creating an incentive to reduce carbon consumption on an individual basis. If my real contribution to the tax this year was $15, I would realize a "profit" of $5. Because I like having the $5, I'll try harder to decrease my carbon consumption further next year to see if I can get to $7 - or more. This incentive, spread out over millions of people, will produce real change, limit the damage caused by warming and make us a more secure nation.

Posted by: TJ Ford | Jan 15, 2013 1:56:49 PM