HOW A CONSERVATIVE TAX REGIME CAN APPEAR A LIBERAL VICTORY:

For makers of fiscal policy, the wrong question is, "Is the planet warming?" The right question: "In formulating future tax policy, does it matter whether the earth is warming?" The answer is "no". At least not when we are working to reform a sub-optimal tax structure.

Cold, hot or just right, we should be aiming for a tax structure that

·     puts a greater burden on consumption than on work and risk-taking, thereby stimulating economic growth;

·     reduces the burden of taxation on lower-income and middle-income tax payers by generating revenues that can reduce regressive payroll taxes without adding to our deficit or raising gasoline prices more than perhaps 18 cents per gallon, a figure well within the range of past fluctuations;

·     makes it possible to dial back some of the subsidies and what have come to be called "loopholes" built into the current structure by leveling the playing field on which renewables and conservation compete with fossil fuels, making continued subsidies both uneconomic and unfair; and

·     enables us to reduce the burden of regulation, especially on the energy sector, by internalizing externalities, making consumers of fossil fuels bear the full costs of their consumption, and allowing tax-inclusive prices to guide consumers' decisions rather than tax-eating regulators.

That would seem to be a program with which politicians of all stripes, and ideologues of all sorts can agree. 

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