Tuesday, April 24, 2007

Carbon tax

Daniel Larison and Matthew Yglesias are interested in why GOP and its pundits are not in favor of some kind of energy consumption-based taxes. Larison's post in particuar touched on several things, but the immediate politics of this are fairly simple. There are essentially three reasons why one might be in favor of enacting an energy tax.

1. To raise revenue for the federal gov't.

For the GOP, this is actually a negative. The amount of revenue to be raised wouldn't significantly help solve the government's fiscal problems, and it creates a moral hazard for the gov't to enrich itself at the expense of individual Americans (or families). This would be mitigated if the gov't (or hypothetical GOP pundits) could show that the revenue generated would finance some end that widely-agreed upon and widely-distributed benefit. In practice, these things tend not to work. In particular, the tie-in to the income tax doesn't seem plausible to me. The Democratic party (and the Left in general) is not in a position to offer any kind of substantial tax relief because they will have to keep tax rates high in order to keep from cutting benefit levels in the various social welfare programs as such programs are about to go on a demographic swan dive. On a more emotional level, the Left hates tax cuts and they just bitterly earned a legislative majority.

2. To help the environment.

Given the track record of doomsday predictions by environmentalists, any Republican who went for this ought to be sued for malpractice. Among other things, there's a dirty little secret that those propping the conventional wisdom of global warming don't like to talk about. That is, if one accepts the pessimistic view of global warming, the draconian "solutions" (Kyoto, energy taxes) don't solve anything.

3. To provide energy independence from the Middle East and other politically unsavory places.

This is legit, but would probably be oversold to the voters.

In Yglesias' case, I think he might be misreading the political landscape as well. The tree-hugger types have spent so much energy hating on the Republicans, I don't think a carbon tax is enough to turn the GOP into a green brand. And even if it did, I still don't think it would be enough toflip the support of bobo-Liberals anyway.

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