After the Election
01/15/2008 by Daniel Rosenblum
Rex Nutting's Market Watch commentary (see "Quote of the Week") properly criticizes the presidential candidates for coming up with Rube Goldberg energy plans instead of having the guts to show leadership by proposing to increase the price of fossil fuels. It's a fair critique, but it's the rare candidate who has Senator Dodd's courage to propose a tax while running for office.
After the election, when there is less concern about cheap shots distorting policy discussions just before voting, it will be far easier to consider the best approach to reducing greenhouse gas emissions. After the election it will be possible to explain that a revenue-neutral carbon tax is a tax-shift, not a tax increase, and that will be good for both the environment and the economy. After the election it will be easier to get past the rhetoric and to recognize that both carbon taxes and cap-and-trade increase prices. After the election, when there is an opportunity for a relatively objective analysis, citizens and elected officials will be able to compare a revenue- neutral carbon tax (which raises prices gradually with an upwards trajectory that gives families and businesses time to adjust by using energy more efficiently and substituting renewable energy for coal and other fossil fuels) to cap-and-trade (which produces volatile energy prices and, under most proposed legislation, huge windfalls for polluters).
For now, we can wait until after the election. Or, take a look at the headlines to the right of this page to learn about the more serious discussions taking place in Canada and Europe.
Before or after the election, it will be beneficial to avoid the problem of proposing "taxes". In reality, if it is revenue-neutral, it is not a tax, it is a rebate system. The gradually transformation of some existing taxes into global warming solution rebates is both the right policy approach and much more rhetorically acceptable.
The proposal to rebate to the public in the form of credits against payroll taxes is great. Combine that with rebating part of it to business as credit against income taxes and you will significantly broaden the potential supporters. In fact, describe the law as a way to, gradually over time, eliminate both the business income tax and the employee portion of the FICA tax, and it becomes even more attractive.
Add an address to your web: nocarbontax.org and orient it around ensuring revenue neutrality and eliminating the business income tax and FICA. Don’t be defensive, go on the offense on the political aversion to "taxes".
Comment by John Hemphill — January 16, 2008 @ 6:34 am
Dan (& Charles),
More than one commenter has written about playing down the “tax” aspect of a carbon tax. Was much thought give to calling it something different from the start? Would we be better off promoting a Carbon Emission Surcharge? Climate Protection Fee? Investment for a Cleaner Future? Something that doesn’t say “tax.”
Cheers,
Bob
Comment by Bob Arning — January 19, 2008 @ 12:22 pm
I just started reading a publication by Lester Brown, Earth Policy Institute.
Well worth taking the time to check it out.
http://www.earth-policy.org/Books/PB3/Contents.htm
Comment by Dean Weichmann — January 20, 2008 @ 2:17 pm
John,
Thanks for you comment. I hope we don’t sound defensive. We sure don’t have any reason to be. We haven’t proposed a rebate to business because we know that most businesses will simply pass the cost of the tax on to the ultimate customers.
Bob,
We’re often asked why we chose to call ourselves the Carbon Tax Center instead of avoiding the "T" word. The simple answer is that it wouldn’t have mattered. If we had called ourselves something else, tax opponents would have argued, with some justification, that we were playing games. There is no getting around the fact that we are proposing a tax on carbon; our challenge is make it clear that we are proposing a tax shift rather than a tax increase. Are we right? I don’t know we don’t have the budget for focus groups. As you may have noticed, FPL is proposing a "fee" and perhaps we’ll be surprised and its approach will have more traction. We’ll try to keep an open mind on the subject.
Dean,
Thanks for mentioning the Earth Policy Institute Paper. It’s excellent and I should have put a link to it on our web site. I’ll do so.
Comment by Daniel Rosenblum — January 21, 2008 @ 1:44 am
Good article in the Financial Times on economists organizing in favor of a carbon tax in the EU.http://www.ft.com/cms/s/0/58ec5cd6-c773-11dc-a0b4-0000779fd2ac.html?nclick_check=1
Comment by Evan — January 22, 2008 @ 2:13 pm
Thanks, Evan. It is a good article and I have it under Headlines.
Comment by Daniel Rosenblum — January 22, 2008 @ 2:25 pm
Dan,
Perhaps you might include http://www.payyourairshare.org/ in your links section. If nothing else, they may have a reasonably catchy name for a carbon tax. We’ll see if they can bring support to the cause.
Cheers,
Bob
Comment by Bob Arning — February 8, 2008 @ 11:01 am
Its a great post and useful also because today everybody want to buy shopping goods online.Thanks for such an helpful post.
Comment by Laura — October 14, 2008 @ 6:55 am