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Monday, September 18, 2006
Gore's tax proposal
Al Gore has made a radical proposal on taxes:
For the last fourteen years, I have advocated the elimination of all payroll taxes — including those for social security and unemployment compensation — and the replacement of that revenue in the form of pollution taxes — principally on CO2. The overall level of taxation would remain exactly the same. It would be, in other words, a revenue neutral tax swap. But, instead of discouraging businesses from hiring more employees, it would discourage business from producing more pollution.
Gore is also calling for an immediate freeze on carbon emissions, to be followed by steady reductions. If that part of the plan was adopted, we would then either see a dramatic reduction in revenue or a dramatic escalation in the carbon tax rate. Therein lies the rub, seems to me. It's one thing to give companies an incentive to reduce carbon emissions by taxing emissions. But if you eventually reduced carbon emissions by 50%, you would have to double the tax rate to produce the same amount of revenue. Or find another tax source.
3 Comments:
I would think Mark would like a tax on a negative externality rather than on income just as a matter of principle. Clinton actually proposed a carbon tax back in his 1993(?) State of the Union address. I can't speak for Al Gore but I bet he would happily see declining revenues from his tax as emissions went down. Sure you'd then have to find a new revenue source but the reduction is likely to be gradual enough that other taxes are adjusted along the way. I think it is disingenuous only if you don't really want to reduce the things you are taxing. I don't think any fair minded person thinks Gore is anything but completely earnest on this particular issue.
I think Mark is taking my point further than I intended. A carbon tax might very well have merit. It's appealing to suggest that we could replace the regressive payroll taxes that make up the majority of taxes most working people pay. But a 1 for 1 substitution would not be enduring.
Hey! Let's pick some nits on Gore's speech!
He resurected that tired old saw about the chinese character for "crisis" being made up of "danger" and "opportunity."
Not really.
Hey! Let's pick some nits on Jambo's comment!
Gore says "The overall level of taxation would remain exactly the same."
Jambo says "I bet he would happily see declining revenues"
OK, I'm just being stupid here, but Hammer's asked the right question: what happens when we get those "sharp reductions" in CO2? I read the whole text of the speech, and I couldn't find a thing about it (though there's some pure comedy gold about ARPANET). It's not an inconsequential side issue, either -- he's talking about shifting the funding for Social Security, Medicare, and unemployment to a brand-new revenue source, then gutting that revenue source. Gore says this is a moral issue, not a political one, but I think when the money for Soc. Sec. starts to dry up, the AARP will let him know just what kind of issue it is.
By 
Joey de Vivre, at
10:07 PM
