This post at ThinkProgress on making a carbon tax progressive very nearly had me convinced. I commend it to your attention, particularly for the eye-catching graphic near the bottom of the post illustrating the effects of the alternatives they consider. If I had more time, I’d sample it.
As I mulled their proposals over, it occurred to me that they’re relying on a trompe l’oeil. The reason that suspension of the payroll tax isn’t as effective as their preferred alternative (writing a monthly check to everyone) is that the poorest don’t pay FICA because they don’t have jobs. In addition cash incomes don’t tell the whole story. When you take benefits into account, it tips the scale towards eliminating FICA a bit except for two groups: people under 25 who aren’t head of household and people with no fixed abodes. Their preferred program will have difficulty reaching the latter group.
There’s another, more basic problem with their proposal. What are they trying to accomplish? Presumably, a carbon tax would be intended to reduce carbon emissions. It only will accomplish that if it influences behavior and it will only influence behavior if the burden of the tax is allowed to fall on someone.
I agree with this claim from the post:
The wealthiest Americans contribute the most to carbon pollution, and yet the poor suffer the brunt of the impacts. Low-income families are more likely to live near crowded highways and dirty power plants, and they are also the least equipped to deal with loss and damage from severe weather or shocks to the food system.
but I don’t think that the author of the post realizes just how much the “wealthiest Americans contribute”. If my calculations are correct, emissions increase geometrically with income rather than linearly. In other words somebody with twice the median income doesn’t just contribute twice as much. He or she may contribute four times as much. Or ten times as much. My WAG is that the top 10% of income earners are probably responsible for 80% of the carbon emissions that aren’t borne by all of us corporately (e.g. how do you account for the military’s carbon emissions?). Just as an example a single flight from Los Angeles to Paris in a private jet emits more carbon than the average American does in a year. That’s not something the lowest quintile of income earners does at all but it’s something that the top .1% of income earners does frequently.
The political reality is that we’re not going to impose a carbon tax that’s draconian enough to influence Bill Gates’s behavior. Or your doctor’s or a vice president at GE’s. If we impose a carbon tax at all, its burden will fall mostly on the lowest 90% of income earners. And if we remove the burden from the lowest 20% of income earners, we reduce the effect of such a tax to the point that it’s having very little if any effect other than the income effects. That’s the sort of result that makes some people question whether progressives are trying to solve problems, e.g. carbon emissions, or trying to create a client class.
I think the bottom line is that while it’s theoretically possible to make a carbon tax progressive if it is to have much effect it shouldn’t be. Which is how I’ve arrived at my opinion which is that we’re better off finding ways to remove the carbon from the atmosphere than we are at relying on pseudo-market strategies for which the unforeseen and unwanted secondary effects outweigh the intended effects.
Among the greatest contributors to carbon pollution are the breeders, who, instead of being taxed, are granted significant tax breaks and other benefits.
Dave, you’re a smart guy, why do you buy into that bullshit at all?
Well, first off, you don’t need to agree with something to be able to evaluate whether a proposal will actually effect what its advocates say it will.
Second, I’m pretty evidence-based. I think while it stands to reason that human action has some effect on the climate I don’t know how to quantify that or even if it’s possible to quantify. At this point I’d say I while I have some reservations about the models that that the climate change advocates are using I’m still open to their proposals on what to do about it in the interests of risk mitigation. So far I haven’t seen much from anybody in the way of proposals that would actually do what their advocates say we need to do.
Maybe another way to look at climate change proposals is to seriously analyze the different kinds of unintended consequences or collateral damage exercising these models might economically have on society.
It’s similar to weighing cancer options. Is the sometimes rather short life extension chemotherapy might offer a cancer patient outweigh it’s oftentimes harsh side effects?
It’s like all the Harvard and Yale grads who run the country never learned about the prisoner’s dilemma and the tragedy of the commons. They certainly didn’t learn jack shit about strategy or coherent foreign policy. Or maybe not – maybe bombing other countries into the stone age is a green, carbon-offset policy.
I don’t know what’s gotten in to you, jan. That would cause people to rationally economize.
Can’t have that.
If I didn’t know any better I’d think it wasn’t really about carbon emissions and global cooling/warming/climate change/whatever sells at all.