January 17, 2019
TAX WHAT YOU DON'T WANT, NOT WHAT YOU DO:
Former Fed chairmen and Nobel economists voice support for carbon tax (Amy Harder, 1/17/19, Axios)
All four of the still-living former Federal Reserve chairs, nearly 30 Nobel economists and all but one former chair of the White House's Council of Economic Advisers have signed onto a statement laying out their support for a carbon-tax policy -- one that has been gaining support from big oil companies, environmental groups and others across the political spectrum.The plan includes a tax on carbon emissions that rises over time, with the proceeds sent back to Americans via quarterly dividend checks.Other carbon-tax policies have put the money toward other priorities, including clean-energy investments and eliminating other taxes.The op-ed published Wednesday says a sufficiently rising carbon tax would "replace the need for various carbon regulations that are less efficient." That point is particularly controversial among some environmentalists who want regulations as a backstop.
A better policy would be to use carbon taxes to offset income tax reductions as a first step towards repealing the 16th amendment and replacing all taxes on income, savings, and investment with consumption taxes.
Meanwhile, there's a hilariously inept conversation about income taxes vs. wealth taxes on The Gist today. It begins from the premise that the single greatest problem with American society is wealth inequality. Which begs the question: suppose that we could magically make 99% of Americans into billionaires overnight, but at the expense of making 1% of Americans trillionaires? Does the inequality make that an undesirable outcome?
Things only get odder as the discussion both, cedes the importance of greater growth (wealth creation), but then argues that taxes should be used to take away the wealth of the wealthiest members of society. So we want to create wealth but also to destroy it? The example they use to illustrate the undesirability of wealth is revealing: a grandfather accumulates great wealth; a father squanders it; the children get none. Obviously, the issue here is consumption not wealth. And this is simply not what the wealthy generally do, or we'd not be wealthy. Wealth is instead invested and thereby helps to grow the economy. To the degree that this is not done to the degree we desire, the solution is to tax consumption and stop taxing said investment altogether.
The real difficulty that the doctrinaire Left faces when it confronts these questions is that it remains locked in a Malthusian zero-sum view of wealth and does not actually believe in growth.
MORE:
HOW TRUMP COULD WIND UP MAKING GLOBALISM GREAT AGAIN (Robert Wright, Wired)
[I]n Trump's hierarchy of bliss, dominance does seem to rank at the top. "I love to crush the other side and take the benefits," he wrote in a book called Think Big. "Why? Because there is nothing greater. For me it is even better than sex, and I love sex." He went on to observe: "You hear lots of people say that a great deal is when both sides win. That is a bunch of crap. In a great deal you win--not the other side. You crush the opponent and come away with something better for yourself."So it makes sense that, two years after Trump entered office, Sullivan's game-theoretical framing has caught on. The zero-sum game--in which the players' fortunes are inversely correlated, so that for one player to win the other must lose--has become a standard paradigm for the Trump presidency. If you Google "Donald Trump" and "zero-sum" you'll get such headlines as "Trump's Zero Sum Delusion," "Donald Trump and the Rise of Zero-Sum Politics," and simply "Zero-Sum Trump."Some of the articles attached to these headlines are about economics. They may lament Trump's gleeful anticipation of "winning" the trade wars he starts--as if trade were a zero-sum game--and his seeming obliviousness to the fact that trade wars can have lose-lose outcomes. Other articles focus on world affairs more broadly. Nations come together to pursue win-win outcomes in the face of all kinds of problems, from financial meltdowns, climate change, and weapons proliferation to overfishing of the seas. And Trump's attitude toward the institutions that embody such nonzero-sum engagement is notably lacking in warmth.As journalist Jonathan Swan wrote on Axios this summer, "Trump has expressed skepticism, and in some cases outright hostility towards NATO, the European Union, the United Nations, the World Trade Organization, and the Group of Seven." Swan added that Trump has "already withdrawn the U.S. from the Trans-Pacific Partnership and the Iran deal" and "announced his intent to withdraw from the Paris climate accord."The zero-sum label applies not just to Trump's policy preferences but to his political style. He's expert at evoking reactions that seem to have been engineered by evolution for zero-sum situations, notably fear of, hatred of, and contempt for a perceived enemy. Bill Clinton presumably had Trump in mind when he said, five months into Trump's presidency, "We've seen a resurgence in the oldest of all social reactions--the tendency to look at people first as the other, to think of life in zero-sum terms, it's us versus them."
Posted by Orrin Judd at January 17, 2019 3:37 PM
