emissions carbon tax pollution externalities

A Tax Everyone Can Love?
gas tax

Can We Quit Burning Carbon Now?

A federal carbon tax would apply to more than just gasoline. It would be levied on any fuel that produces carbon dioxide emissions. Once we get used to the idea, taxing carbon makes sense. Pay for what you take, not what you make. This 2013 excerpt is from the Los Angeles Times , Apr 21.

by Doyle McManus

So here's another good bipartisan idea that the tax committees should consider: a new federal tax on emissions — more frequently called a carbon tax.

America consumes the equivalent of about 48 barrels of oil per person per year; Germany, with the healthiest economy in Europe, consumes just 26.

Economists call the hidden costs of energy consumption — the prices of climate change, pollution, and national security — "externalities." They're real costs, but they're not included in the price of the gasoline you put in your car or the electricity you use at home.

Even the federal gasoline tax that's now levied doesn't come anywhere near covering its purpose of paying for highways. The gas tax has been stuck at about 18 cents a gallon since 1993; if it had risen with inflation over those 20 years, it would be about 30 cents.

A federal carbon tax, though, would apply to more than just gasoline. It would be levied on any fuel that produces carbon dioxide emissions. That means it would fall heavily on coal, less heavily on oil and only lightly on natural gas. It would make energy efficiency more valuable and alternative energy (like wind power) more competitive.

Most or all of the money that's collected can be returned to consumers — in the form of lower tax rates, tax rebates, or other measures to ease the pain.

If it were part of a "revenue neutral" deal, in which all the taxes that came in were returned to the taxpayers some other way, it wouldn't cost a nickel. If it were part of a revenue-raising deal, in which some of the taxes didn't come back, it could help cut the federal deficit and reduce the national debt.

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JJS: If you pollute, you should pay. If you deplete, you should pay. If you exclude others from a part of nature -- as from the land you own -- you should pay. “Pay for what you take, not what you make.” You should not have to pay taxes for earning, purchasing, or owning buildings. So what’s called for is a total shift from taxing efforts to charging occupiers. The other big necessary shift is from letting politicians spend public revenue to letting citizens spend it, by paying them a dividend from all these recovered “rents” (in econo-speak) paid by people using, abusing, and claiming parts of the natural world.


Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

Smart Taxes Can Help Align Economies & Ecosystem

Salt, CO, & Jobs Harm While MJ Can Help

Humans Did It Once, Can They Do It Again?

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