Comments on: Dingell: My Carbon Tax Bill is “Off the Table”

By: Glenn

Glenn — Sun, 27 Apr 2008 17:03:52 +0000

The word tax is an immediately turn off for many people as it should be, as politicians are always looking for sources of revenue. At least payroll taxes are not hidden and should help keep some groups from feeding at the federal trough, think hidden ethanol tax subsidy. My dictionary says a tax is to fund government. Why not make it an assessment that cannot be used to fund government and must be returned equally to all tax filer. If this were done all federal energy subsidies and mandates, that are also inefficient, would be unnecessary.

By: Wyatt

Wyatt — Fri, 25 Apr 2008 17:04:48 +0000

I think it might be best if this issue was framed as a tax shift, and just get rid of the whole notion that it’s a new tax, or a carbon tax. If you mention anything to do with a new tax it seems many people (and politicians) just tune out, or worse. I would start discussions on this issue as, "I think we should reduce income and payroll taxes - and solve climate change…" I wonder if taxshift.com is available.

By: James Handley

James Handley — Mon, 21 Apr 2008 19:17:40 +0000

Correction: Dr. Kahn’s paper on an international carbon tax system is here. I also recommend Dr. Rob Shapiro’s paper. And yes, David, ideally the system would be fine-tuned; low-carbon processes and products were taxed less. Presumably, manufacturers and importers would have opportunities to point out instances where their products were more efficiently made and to request appropriate tax reductions.

By: David Collins

David Collins — Sun, 20 Apr 2008 02:44:31 +0000

Mr. Handley: Your argument favoring carbon taxes, that taxing the carbon footprint of imports, up to the amount of US taxation, blows away objections (to carbon taxes) based on the purported trade disadvantage. However, I do not know how carbon-use efficiencies, or lack of them, would be handled: in basic steel production, for example, different processes differ in carbon-intensity, and within a given process there can be a wide range of carbon intensity, the higher carbon intensities tending to vary directly with capital intensity. School picnic for pettifogging sea-lawyers, quite contrary to how carbon taxes should work.

By: James Handley

James Handley — Sat, 19 Apr 2008 04:24:28 +0000

You’re right: trade effects are huge. To answer your question: YES, China would have strong incentives to enact a carbon fee if the US did.

If the US enacted a carbon fee we’d also impose the fee on “embedded” carbon of imported goods. (Under international trade treaties countries can tax imported goods the same as domestic ones — “harmonization” to maintain a “level playing field.”)

If the Chinese matched us, we’d no longer have reason to “carbon” their exports to us. (“Double taxation” is prohibited by trade agreements.) By enacting their own tax, China would capture the revenue that the US had been getting on goods exported to the US without suffering any trade disadvantage. Capturing that revenue stream is a big incentive for our trade partners to enact their own carbon taxes.

A carbon tax is much easier to internationalize than “cap and trade” or regulation. See “Beyond Kyoto: A tax-based system for the global reduction of greenhouse gas emissions” by Dr. James Kahn of Washington & Lee U., published in Ecological Economics. Click here.

By the way, China has rejected a carbon “cap” as has India. And a “cap” WOULD create trade disadvantages for countries that enacted it compared to those that did not.

By: Jerry Ritter

Jerry Ritter — Fri, 18 Apr 2008 21:24:31 +0000

Well, here we go: one more way to further disadvantage U.S. businesses. Do you seriously think China’s going to do something similar?

By: Daniel Rosenblum

Daniel Rosenblum — Thu, 17 Apr 2008 13:40:39 +0000

Manny Lopez got it right in his Detroit News column today:

The candidates are disingenuous. They have about as much interest in truly helping the auto industry as they do in drafting fuel economy or climate change legislation that’s comprehensive.

If their interest in those things were real, they would have supported U.S. Rep. John Dingell’s comprehensive carbon tax proposal that he floated last year in which he promoted a gas tax and carbon fee for all industries.

The put-up-or-shut-up nature of the Dearborn Democrat’s proposal was dismissed by most because it had real costs.

Dingell dropped the proposal Tuesday because, he said, his constituents couldn’t afford it. Whether that’s the real reason remains to be seen, but one thing’s for sure, the plan had teeth — something lacking from all the pandering today.

By: James Handley

James Handley — Thu, 17 Apr 2008 13:01:59 +0000

Names matter. The Lieberman-Warner cap and trade bill with an auction for permits (advocated by presidential candidates) is certainly a "tax" -- it would raise fuel prices and divert funds to government programs (some, no doubt worthy such as energy conservation and renewables).

The Carbon Tax Center's revenue-neutral proposal: to "recycle" the revenue by distributing it to equally to each household and Gore's suggestion: to use carbon tax revenue to offset payroll taxes both shift tax burdens onto environmentally damaging activity without increasing the total tax burden on the economy.

In short: the cap and trade proposals should be described as "CAP, AUCTION, TRADE AND SPEND," and Gore's suggested revenue neutral-carbon tax should be described as "TAX CARBON BURNING INSTEAD OF WAGE EARNING."

Once we've got the names right, maybe we can have a fair debate.