Last August I discussed a truce from the left to the right on climate change – Climate Change IV, Diverse Thought Anyone? Last week, to advance the story, I alluded to further potential solutions described by Grist and the “eco right’s” bold idea to advance a carbon tax as a solution. Here we go!
There are a bunch of reasons a carbon tax is a bad idea, but to my surprise, I was able to conceive a carbon tax plan that may work, be revenue neutral, and not be corrupt.
A New Tax Meets With Conservative Principles?
First, let me toss in the cliché, that everything is relative. RepublicEn (aka, the eco right), referenced in the Grist article, may seem like a conservative outfit to Grist, but it wouldn’t be to conservatives. The spokesman for RepublicEn, Alex Bozmoski, says a carbon tax would be “the only solution that’s effective enough to address climate change, and fits with conservative principles.” I think Mr. Bozmoski has been in academia a little too long. A new tax does not fit conservative principles.
An Olive Branch
Friends come and go. Taxes are forever. If you want to get serious about a carbon tax, you have to wipe out a big one in its place. What is a big one? The payroll tax; the gasoline tax; the corporate income tax; investment-income taxes, including capital gains. When you’re ready to nuke any of these, give me a call. I will be on board. Otherwise, we will have the taxes we have now, or more, PLUS the new carbon tax.
Money Will Be Used for Carbon Abatement – Shyeah
In DC, there is no such thing as money coming from one stream and using it specifically for something wholesome and worthwhile. Reference the social security “trust fund.” It should be packed with trillions of dollars. Instead, it is full of worthless IOUs that will never be paid back. The trust fund was raided to pay for critical things like tax breaks on racehorse owners, rum distillers, and NASCAR track owners. Trust me when I say, a carbon tax will be used to displace crap like that. Guaranteed.
It is Regressive
A carbon tax is regressive.
Low-income folks would spend a substantially higher percentage of their income on a carbon tax compared to wealthier folks. While I don’t like “progressive” tax structures because they punish success, regressive certainly isn’t right either.
A Regressive Solution Worse than the Problem
Another politically naïve idea is to give credits back to low income. This is what makes the system corrupt. First, it gives Washington power with our money.
Second, it adds to the steepness of the upward mobility curve. As people earn more, more tax credits disappear, and more is paid in payroll and income taxes. The incentive to work and save is stifled by steeply progressive tax policy.
Third, large companies will get their carve-outs. Stuck with the shaft, as usual, will be anyone making between $50,000 and $500,000 gross income. Raise your hand if you fall into this bracket.
Want a fact that may blow your mind? Four out of the five richest counties in the United States surround Washington DC. There is an obvious reason for that. The trough sits at the intersection of East Capitol and First Street, Washington, DC. Those with the most Sulphur-spewing K-Street lobbyists win!
Ok? Hundreds of billions go to DC, where no one tracks it. The media are more interested in political and personal vendettas than investigative reporting to expose these frauds. The media is part of the racket.
I promise you with 30 years of watching, listening, and reading how things work in Washington, DC, almost exactly what I describe above will happen with a carbon tax. It would:
- Take money out of your pocket, send it to DC with no accountability of results.
- Be redistributed to the lowest and very highest ends of the income range leaving the huge middle class (everybody reading this) with the bag, and it ain’t full of gold coins.
- Further, entrench the puppet masters.
An Improbable Workable Solution
The improbable workable solution involves giving states the power and responsibility for results. This is opposite the way Washington works – which is, to blackmail states by withholding disbursements, such as highway or healthcare funds, if they don’t act according to centralized diktat. This forces states to do the dirty work.
A solution I might favor would work like this: the feds collect the carbon tax, and the money is returned to the states with zero strings attached. Michaels Energy was founded by a block-grant-funded program during the Reagan era. It was effective, open, and well-policed by a state oversight organization, not unlike regulators.
What are the chances of the block-grant solution? Very low, but DO NOT fall for any other plan to simply add a “revenue neutral” carbon tax – unless you like being poorer at the pleasure of the mega-wealthy – oh, and with no impact on carbon emissions.