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Dissecting the Carbon Tax
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Contributor | Imperator |
Last Edited | Imperator Jul 16, 2012 10:52am |
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Category | Analysis |
Author | Kenneth P. Green |
News Date | Monday, July 16, 2012 04:00:00 PM UTC0:0 |
Description | Back in 2007, along with my colleagues Steve Hayward and Kevin Hassett, I coauthored a policy study examining the possibilities of a carbon tax or carbon cap-and-trade. The findings of that study were that a revenue-neutral carbon tax was better than cap-and-trade, which would be better than regulation.
For coauthoring that study, my friends in the more purist domains of the free-market movement lambasted me for playing into the hands of an insincere green movement. At the time, I thought they were going overboard. I naively thought that a revenue-neutral carbon tax might be possible, and if done right, might offer economic benefits that might mitigate its economic harms; if we replace taxes on productivity with taxes on consumption, we might get a net, economy-wide benefit.
However, watching states loot "dedicated" eco-taxes for general revenue, seeing the emergence of more proposals for revenue-raising carbon taxes to finance continued deficit spending, and generally bearing witness to endless insincerity on the part of greens and their allies, I have to admit that my friends in the free-market movement were right: A carbon tax would simply become another general revenue raiser and a step in carbon-seduction. "Oh, come on, you've already accepted the tax, now let's do cap-and-trade and regulation."
Hence, my views on the carbon tax have evolved: I no longer believe that such a tax (or, for that matter, other eco-taxes) can be implemented in the sort of ideal, economically beneficent way that people favoring individual liberty, free markets, or limited government might sanction. Here are a few reasons why: |
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