March 20, 2019

OFFSET INCOME TAXES INSTEAD:

Carbon Taxes Are the Original Green New Deal: There is a better way to reduce harmful emissions than the expensive, unwieldy proposal backed by progressive Democrats. (Steven Rattner, March 20, 2019, NY Times)

Fortunately, there is a better way to address the climate problem at far lower cost to the economy: a tax on greenhouse gas emissions. That can be imposed in any number of ways. The 18.4 cent federal gasoline tax, for example, hasn't been increased since 1993 even as most other developed countries impose far higher levies.

A particularly thoughtful proposal has come from the Climate Leadership Council, a bipartisan organization that counts more than 3,300 economists among its signatories. Elegant in its simplicity, the key provision would be the imposition of an escalating tax on carbon. At an initial rate of $43 per ton, the levy would be roughly equivalent to 38.2 cents per gallon of gasoline.

To prevent polluters from fleeing overseas, the tax would be imposed on imports from countries lacking a similar provision while exports to those countries would not be taxed. While difficult to implement, that component is important to work out.

The entire proceeds from the tax would be rebated to consumers. The council suggests an equal amount for each American; my view would be to exclude the wealthy (who hardly need the estimated $2,000 a year in payments) and disproportionately favor those closer to the bottom.

Posted by at March 20, 2019 4:00 AM

  

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