From Ezra, I see that Al Gore is beginning to include proposals to remake the tax structure to get rid of payroll taxes and replace the revenue with a carbon tax. In the comments section, Nicholas Beaudrot estimates that in order to keep revenues the same this way while eliminating all Social Insurance taxes (for most of us, that’s Social Security, Medicare, and unemployment), the tax would come out to $1.20 a gallon of gas. And that’s to replace both employee and employer contributions. From Gore’s speech:
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.
I whipped out the calculator and realized at minimum I’d save $400 a month under this plan. So I’m for it. Okay, I kid (sort of). There’s a lot more reasons to do it than just personally saving me money. One is that it would make the tax structure more fair, moving some burden off middle class people and onto industry. There’s no cutoff on this tax where you only have to pay it on the first $90,000 you make a year.
But clearly the reason to do it is that this would have a real life effect on people’s consumption habits, because you can reduce your tax load by driving less . Most people aren’t going to make less money so they can pay less payroll taxes, of course, because then they just have less money overall. But taking that bike to work or getting a more fuel efficient vehicle to reduce your tax burden is within the reach of a lot of people. Industry would be forced to seek out ways to reduce pollution, too.
Really,the only downside I can see is that it would increase inflation, at least temporarily, but the across the board raise for working people would mitigate that significantly. The best part is that conservatives arguments against it are probably going to be weak, because this plays right into their asinine theory that taxes discourage activity in all circumstances, even when the activity is still beneficial on the whole—this, after all is their argument against an income tax, which supposedly discourages people from making more even though they still end up netting more. If you can convince yourself that people will actually be less wealthy out of a pouty need to deprive the government, then you can probably grasp that people will actually dial down a behavior when the expense of it outstrips the gain for them.
48 Responses to “Hell, I’d vote for it”
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It’s a great idea, but in order to be really effective it needs to to be bundled with some structural changes to the ways Americans use energy and transport and lay out their communities. Obviously, something like this would need to be faded in gradually, but by the time the transition (of, say 15 years) is complete, the economics of buying not just gas-guzzling cars but also giant subdivision homes 50 miles from the office. We’re going to need much more investment and innovation in mass transit, zoning rules that encourage density and walk/bikability, and incentives for people to move into dense communities and smaller, more energy efficient homes. A lot of this stuff needs to happen at the state and local levels. Some sort of assistance might be in order fo exurbinites whose home values collapse.
If I were Gore, I’d let the tax proposal sink in and then propose a massive rebuilding of America’s rail system. It would provide a vastly more efficient alternative to long-haul automotive travel and shipping, and would create thousands of manufacturing and construction jobs.
As much as I’d like to see a carbon emissions tax, I can’t see how it makes sense to tie it to Social Security funding. The logic behind the current structure rests on the assumption that employment will remain fairly stable over a long period of time. One of the long-term goals of a carbon tax would be to reduce drastically the amount of fossil-fuel consumption. Imagine if this were successful. From where, then, would we get the funding for Social Security payouts? Granted, employment levels compared to retiree survival has changed significantly over the decades, and has gotten us into a bit of trouble (though not nearly as much as the privateers would have us believe). But there remains a natural connection between past employment levels and current ones, which is how the system remains relatively solvent.
This proposal seems attractive because it follows an offset principle. New taxes? Politically, the only way to get them passed is to eliminate others, right? However, this feasibility is probably a mirage, since the business forces behind keeping emission-reduction costs low are extremely well-organized.
That’s great for people who have fuel-efficient cars or can live close to work.
But most actual poor people have to get by with cars that are cheap as hell without much regard for fuel economy and gas mileage. Cars you can get for $750 aren’t usually known for being good on gas. For those people — many of whom make minimum wage or not much above it — I have serious doubts that this would amount to a raise. It’d help the middle class, maybe, but the very poor would get fucked over yet again.
Anything that amounts to a sales tax is by its very nature regressive. No industry is going to take a hit from this. They’ll just raise prices. Their profits won’t be touched. They never are. This means that on things poor people spend more money on — electricity, food, gasoline, clothing — a huge price increase will occur. Those wealthy enough to save, or who are purchasing expensive luxury items, won’t be hit nearly as hard — less of their money is spent on food, gas, and utilities, which will be hit hardest by this tax.
Sales taxes are always regressive. “Make the poor folks bike to work” doesn’t seem like a very egalitarian measure at all.
Molly’s right. The idea is too appealing to drop altogether though - maybe there’s a way around that? A threshold of consumption below which there is no tax, maybe? The proposal is designed to gain most of its revenue from industry, not individuals, so it probably wouldn’t make too much of a difference. Maybe retain a small tax in another area to balance things out. Industries might or might not raise prices - there is a threshold at which their revenue drops so much as a result that its’ a better idea to cut into profits than to lose the consumers who won’t buy at the higher price. This is irrelevant discussion though, really, as at the moment our government is damn near completely controlled by corporate interest groups, and will never let any legislation like this get a fighting chance, no matter how pitiful the excuses for not supporting it. But then i’m cynical.
Well, the reason to tie it to the payroll (social security and medicare) taxes is to make it “non-regressive”: the “gas” tax is offset (usually more than offset) by the rebate back of FICA for the average working stiff. Yeah, prices would go up, but every working person who makes under 90K would get a functional 6-8% pay raise.
Even if inflation goes up to 5.75%, you’re still coming out very much ahead.
What Molly said. Unless this comes with a massive overhaul of the public-transit system (like, getting one) and with some way to keep poor people in areas that just won’t have buses from getting screwed royally, I don’t think it’ll work.
It is not economically possible to shift a tax burden to industry. All taxes are paid by consumers. Sometimes the actual check to the government is mailed in by a business, but it is their customers who provided the money to pay it.
That aside, such a change wouldn’t save you anything, Amanda. You would pay $400 a month less in Medicare deductions from your paycheck, but every material good you buy that isn’t produced within walking distance of your house from locally-grown materials would cost you significantly more. The economic significance of that category of goods, for 99.9% of Americans, is diddly-squat.
Molly is exactly correct. The people who would really take it in the shorts with this tax proposal are the poor; the working poor, for whom gas expenses are usually a major direct cost, would be absolutely screwed.
The only way for a “progressive” to be in favor of this tax proposal is to be unaware of how economies work. I don’t suspect Al Gore of being ignorant, nor do I suspect that he wants to screw the poor; instead, he wants to be an Important Person talking about all the Important Ideas he has.
“All taxes are paid by consumers. Sometimes the actual check to the government is mailed in by a business, but it is their customers who provided the money to pay it.”
Doesn’t this assume that companies don’t have a profit margin above and beyond reasonable compensation for their employees that can be raised or lowered based on cost/demand for their product? This is certainly true for some businesses, but by no means all.
I will grant that costs for things like food would be majorly and really badly affected under that idea, and that’s probably a reason to chuck it altogether, though. Eliminating the offshore tax loopholes might be a better idea.
I think a Carbon Tax of some sort on gas, vehicle makers and polluting corporations is both a good idea and inevitable. Gore doesn’t give enough details, however; to really speculate on what it would look like to ordinary Americans, rich or poor.
Replacing all personal payroll taxes with a gasoline tax will never happen. Gore is just trying to get headlines and a national dialog started.
Unfortunately the wingnuts will distort this to paint him out as crazy. Also, a real concern is that we would hike our energy taxes to replace income tax and then some other nasty administration down the road will just tack income taxes back on, thus screwing everyone again.
Count me as one more vote for Molly’s post. Sales taxes are inherently regressive.
Let’s not forget that this is a huge, spread-out country where driving is often a necessity to function as an adult. That fact won’t change no matter how often anyone points out the evils of pollution.
Actually, molly, since payroll taxes are extremely regressive—you don’t have to pay them if you make over a certain amount—this would be a lot more progressive than payroll taxes. For poor people, getting an automatic raise of $300-$500 a month would be a huge boon. The rich will try to create shelters, of course, but to single that out pessimisstically is to ignore that the rich already have huge shelters this plan would take from them.
And if you have Sir “Screw the Poor” Robert saying that this idea is bad, you can guess it’s benefitting the workers over the rich. He’s a knee jerk reactionary to the bone.
To assume that the cost will “just be passed on” is to be actively against the idea that businesses are in competition with each other. While there’s no doubt a lot of Robert-supported price fixing (especially with oil!), there’s only so much they can do. Oil companies have record profits. They’ll have to give a lot of those up.
Plus, while there’s truth the fact that rising gas prices will raise food prices, if you think that’s scary, wait until you see what having massive amounts of farm land become unusable from global warming will do to food prices. It’s either reduce now slowly or have it just cut off due to catastrophe in the next few decades.
I’m not poor but my income is well below the national average. I live paycheck to paycheck. $400 a month more into the pockets of people like me is nothing to sneeze at. And that’s net. That’s the number I got after adding my payroll taxes back into my paycheck and then subtracting what more it would cost me a month to pay $1.20 a gallon on gas.
I don’t drive, so I’d be open to it.
I know Ya’ll are just dying to make me Preznit; at least, I have a better proposition! Why don’t we just seize the wealth of the top 1% of American citizens, and use it to pay for everything?
I’m Serious.
The downside is that carbon consumption isn’t as optional as you think. People who live in thinly-settled states — Texas, say, or Montana — have to drive long distances to shop, or have supplies delivered by UPS, which comes to the same thing. Similarly, Northerners pay enormous sums to heat their houses in the winter; that’s not discretionary money. And most parts of America have little to no mass transit, so that poor people have to drive to get to work.
I love the abstract idea that “wasteful” carbon consumption is taxed — that guy in the SUV, that woman (me) making orders to Amazon on two consecutive days when she could be combining orders. But given existing American patterns of settlement, there’s a lot of carbon consumption built into the economy. Tax carbon without some sort of offset for extremes — extreme heating costs, extreme cooling costs, extreme travel costs — and you are going to place an extraordinary burden on the poorest of the poor, who already have to struggle to get to work in areas with lousy mass transit.
I read somewhere it’s only like TEN PEOPLE ! (The top 1%, who own 98% of our wealth).
God, I am SUCH a COMMUNIST !! Sorry.
The Gore fans better hope this is an indicator that he’s not running again. If he does, you can guess this proposal will get composted faster than I can type the words “Occidental Petroleum.” :p
The Gore fans better hope this is an indicator that he’s not running again. If he does, you can bet this proposal will get composted faster than I can type the words “Occidental Petroleum.” :p
OK, so we’ve established that because of the way our cities and suburbs are designed, most people are dependent on their cars for day-to-day activities. That’s a given.
I and think most people here would agree that that’s a bad thing. Unsustainable, polluting, isolating, yada, yada, yada.
So if not a carbon tax, then what?
Massive investments in public transit, you say. Done. We spend billions on transit every year, even with the GOP in charge, but our land-use patterns don’t support its efficient use, and the number of miles driven in this country keeps going up.
So, let’s change our land-use patterns then, hmmm? Well, lots of folks out there are trying to do just that, but it’s an uphill slog. As much as most people like the idea of walkability, bikeability, etc., once that evil word “density” comes up, they run screaming to the planning commission or city council about how that (choose one) apartment complex, condo development, mixed-use project will ruin, just ruin, their neighborhood, their property values, and it will probably rape their dog too.
If not a massive carbon tax, what on earth do we do to convince people to change the way they live?
I’d really love an answer.
True enough, Jonquil, but that argument can also be used to argue against payroll taxes. Most people have to work to live, so isn’t taxing work unfair?
The thing is that this tax would be levied while eliminating the biggest tax burden on working class people. Anything that starts with the premise that the regressive, burdensome payroll tax burden should be eliminated and exchanged for something fairer has my ears. Right now, all the revenue for payroll taxes is generated by income under $90,000 a year. By spreading that burden to industry and income above the $90,000 cut-off, this is a relief package for working people.
Amanda,
I don’t think this is a good idea for political reasons. One of the sources of very strong support for Social Security is that it is seen as a system where everyone pays into it. I’m worried if we remove this universal ‘pay-in’, the Republicans will find it much easier to privatize social security. I would sooner see the cap on income removed.
One thing that I would insist on in any such proposal (it might be in this one; I haven’t RTFA yet) would be exemptions for mass transit systems. I think it would be quite fair enough to grant them a break on this that they could pass on to their riders. On the other hand, there might be some question of who qualifies as “mass transit” for such purposes; local busses, El, subway, naturally, but what about reginal or interstate busses? Amtrak? Airlines??? I’d be for them for most anything short of airlines myself, but it would be a bit more room for debate.
Um, Mike, who doesn’t use some carbon? Even the Amish have kerosene lanterns.
As a Chicagoan–that is, a resident of a city which actually has a functional public transit system–I LOVE this idea. Yeah, we’ll need to put provisions in place to compensate the rural/suburban poor/working class–but what suggestion do y’all have for stopping global warming? Because you know what would really suck? Midtown Manhattan being underwater in sixty years.
What Nelle said. The burdens the poor would face with this plan will only continues to get worse. You’ve got to break the cycle somehow. Unless something pushes people to embrace public transportation, our cities will continue to be built with an eye toward urban sprawl, which isn’t very compatbile with public transportation, and the problem will continue to get worse and worse. Vetoing the idea by saying “but it hurts poor people” is essentially an admission that the problem is never going to be fixed.
Also, Amanda, I don’t think inflation would really be a downside. Admittedly my foundation in economics is somewhat weak, but my understanding is that the only thing that can cause inflation is when the government injects money into the money supply. Any injection (people having extra cash) would be offset by other companies needing to pay more in. Perhaps you’re worried about the effects of a sudden transition? If that’s the case, just make it a gradual transition over a number of years instead.
And if you phased the transition over, say, five years, that would also lessen the burden on the poor, too.
The thing is, I’m not at all convinced this is a burden on the poor, since it’s taking a tax that’s solely on those who make under $90,000 a year and expanding it to everyone. Will what people pay at the pump outstrip the thousands more they net in a year from not paying payroll taxes? I don’t think so. Like I said, as someone who makes an okay wage, but well below average, this would be a huge tax relief. Any and all support for relieving the tax burden on the working poor should start with eliminating payroll taxes. Which this plan does. It’s already three steps in front of any other tax plan I’ve heard of, just for that.
Let’s not forget that this is a huge, spread-out country where driving is often a necessity to function as an adult. That fact won’t change
What? You don’t think it’ll change when gas goes up to eight bucks a gallon? Ten? Twenty? Those proces per gallon are coming, carbon tax or no carbon tax. In fact, a dollar a gallon carbon tax might well postpone the $20/gallon days to come.
The change is gonna happen. It’s going to suck most for the poor no matter what. We can plan for it, or we can let it happen on its own.
Yeah, I kinda like it. But as others have noted, I worry that it would make Social Security funding more vulnerable to wingnut attacks. To the extent that most people view Social Security benefits as “this is what I worked and paid for, it’s MINE”, there’s much more resistance to attacks. The connection between what you individually paid, and what you’ll individually get, is much more tenuous with this scheme.
As for “people not having to pay FICA”, I think that’s only half right. You’ll get *your* half of the FICA payroll contribution. But I’d bet it’s extremely rare that an employer will boost your wages by the employer half of FICA.
So if you remove $400 of FICA tax ($200 employee+$200 employer) but wind up having to pay $400 in carbon tax, you’ll actually be $200 worse off, while your employer will be $200 better off. A gradual phase-in might avoid this, or maybe it’s the price that has to be paid to keep rethuglicans from shooting it down.
(the above example assumes that the two taxes are the same on an individual basis, of course they’re mostly not. But I think the broader point is still valid: employees won’t recapture the employer FICA contribution, so on average will wind up paying more)
I still think we need some form of carbon tax, but maybe not this form.
What Nelle Said.
I’m not convinced a Carbon Tax would work in the long run, but it’s better than continuing to watch the problem get worse. The way to make it sustainable would be to keep updating it so it’s revenue neutral, meaning that fossil fuels get more and more expensive the more alternatives there are available.
It’s a pretty dramatic shift in the economy to make though. It’d have to be timed to line up with an employment boom or it could mean a lot of jobs lost (in the short term).
It’d also need to be pakaged with a Utility subsidy for places that are extremely cold or hot. You can’t really expect people to go without AC in the Deep South, nor without heat in places that have real winters. Transportation costs can be absorbed through lifestyle changes but I’d damn near freeze to death if I stopped heating my home.
“What? You don’t think it’ll change when gas goes up to eight bucks a gallon? Ten? Twenty? Those proces per gallon are coming, carbon tax or no carbon tax. In fact, a dollar a gallon carbon tax might well postpone the $20/gallon days to come.
The change is gonna happen. It’s going to suck most for the poor no matter what. We can plan for it, or we can let it happen on its own.”
Damn, beat me to it. And here I thought that *I* would have the honor of stating the obvious.
And Robert, stop with the “businesses don’t pay taxes” bullshit, okay ? I own a business, and I can guarantee you that most businesses don’t have that kind of pricing flexibility unless they have a monopoly or near-monopoly on their market. We price our products according to what the market is dictating, and this includes competing companies from other countries that have huge cost advantages over us due to cheaper local labor.
The change is gonna happen. It’s going to suck most for the poor no matter what. We can plan for it, or we can let it happen on its own.
Clearly, questioning one particular proposal for planning for it means that you must think we should do nothing at all.
I worry that it would make Social Security funding more vulnerable to wingnut attacks. To the extent that most people view Social Security benefits as “this is what I worked and paid for, it’s MINE�, there’s much more resistance to attacks. The connection between what you individually paid, and what you’ll individually get, is much more tenuous with this scheme.
I was just about to make this point, and the last commenter finally caught it. Without any accounting of the amount paid into the SS system by individuals, there will be a much more difficult argument to make about who gets what amount of money out of the system when they retire. This will inevitably lead to an equalization of the system, and its appeal among the middle class, and the general public, will begin to wane due to doubts about its equity and fairness. Not to mention it would make the amount paid by Congress to the SS system out of the general revenue subject to constant review and adjustment on political whims.
In a petre dish economic experiment, this might be a good idea (to remove Social Security payroll taxes and replace them with something else not tied to income), but it will lead to a political vulnerability of the social safety net, imo..
Medicare, on the other hand, is covered on an equal basis among all seniors. As is Medicaid on all who qualify. Both classes of people consume carbon fuels on a less unequal basis.
If you want to do this replacing payroll taxes, just leave Social Security out of it.
People would adjust very quickly. If not bicycles and busses, at least carpooling would be an obvious way for people to start cutting their tax bill in half. Commute totally sucks? There’s an option in real estate of *trading* houses– swapsies could help out a lot of people stuck on the wrong end of town, if they wanted it bad enough. As for use off mass transit,t he more demand there is for it, the better it usually gets.
As has been pointed out above, we can raise fuel costs now while it’s optional, or we can have Peak Oil and global warming hit us in the economic and financial gut all at the same time in the not-too-distant future.
The point of replacing payroll taxes with the carbon tax is to make it cheaper for employers to start hiring people *close to the market*. That is, instead of burning hundreds of barrells of oiil every year importing widgets from a factory in China, the payroll tax cut combined with the carbon tax would make it make more sense to build American widget factories close to the widget buyers. Gore *is* thinking in terms of the big economic picture.
However, the point that as the market adjusts and starts cutting carbon usage, we will then have a budget shortfall again does not seem to be factored into his plan. However, the overall boost to the American economy created by all the new jobs and efficiency just might help. It would certainly help with the whole trade deficit thing, and might mean an economic renaissance which would help fix the tax situation though growth. That’s a bit iffy, though.
Another possibility would be using a carbon tax to pay for Universal Medical Care. With individuals and businesses freed of the burden of paying through the nose for insurance and medicine costs, they would better be able to pay the carbon tax, and America would be better able to compete in labor costs because big businesses wouldn’t have the insurance costs to deal with.
I am always amazed (this is not a snark) that an extra $1.20 per gallon can be seen to have such a crippling effect. Pump prices in the US are, what, $2.50 on average, so we’re talking about raising that to $3.70.
In the UK, right now, we’re getting to about 95p per litre. That’s $1.70 a litre - $6.43 a gallon. Yes, I know the US is a bigger country, and you don’t believe in trains, and buses are only for Mexicans. But it’s still an interesting bit of perspective.
What this needs is some serious analysis. Maybe it’s been done already. But, logically, since it’s a revenue-neutral tax, there are going to be equal amounts of benefit and harm to making the change.
Grumpy’s point is a good one, 1) but if employers end up better off by their share of the FICA tax, that’ll help them deal with higher fuel costs, won’t it? 2) and it only holds for the rare case where someone’s carbon tax contribution exactly matches their FICA bill. There will be people like this - but how many, and how well-off?
More generally, who’s going to win and who’s going to lose? Expensive fuel means that rural people will pay more (which means trouble if you want to get it through a Red Congress…) as will those who travel a lot, and especially those who fly frequently. Heating oil will cost. Dirty electricity will cost - but not electricity bought from wave, wind, hydro or nuclear plants. Propane (God’s fuel) will cost, but less so than oil…
Oh, btw, it is impossible for the top 1% of taxpayers to be 10 people, unless there are only 1000 taxpayers. Kathy, I think you probably read that .0001% of the population has an unbelievably large portion of the wealth, or a similar number, and you lost track of the decimal point. There are over 300 million people in the US, so you were actually talking about confiscating the entire wealth of over 3 million people.
Dirty electricity will cost - but not electricity bought from wave, wind, hydro or nuclear plants.
Well, that’s assuming we make some changes in how utility companies behave. Here in CT, our electric company has announced rate increases to deal with the higher generation costs for fossil fuels. Now, CT has a program that allows choice of one’s energy supplier, and we’ve switched to 100% renewable sources. On a hunch, we contacted the utility, and were told that our bill would still go up. Remember, their justification for the rate hike was fuel costs, not transmission costs. So making some of these shifts in energy usage more attractive will require getting tough on some deregulated monopolies again.
And it’s interesting to see the regional perspectives at work when discussing the impact on the poor. In urban New York state and CT, the problem is that many of the “working poor” can’t afford cars now. Their catch-22 has already arrived, since they have to live and work near mass transit, and companies aren’t locating near mass transit. (NYC is a special case, since housing costs are highest where the jobs are. This just means the low end have to commute a really long way via mass transit.) The poor people aren’t the ones moving out beyond the furthest exurbs; no, that’s McMansions and office parks. Or are we discussing those minimum wage earners that live in McMansions or nonproducing farms? Any unaffordable driving that the poor have to do is a symptom of sprawl, whose costs already affect them disproportionately. Perhaps a system to keep businesses and wealthier people from externalizing these sprawl costs would change the pattern. Maybe… a carbon tax?
Samantha: I think Kathy means that 1% of the entire tax revenue of the United States is paid by ten people. Which sounds about right.
It’s important to note that this isn’t the whole tax base being moved to a gas tax, it’s only part of it: payroll taxes. I too was worried that a gas tax would end up hurting the poor more than anyone else, but Amanda’s point that this tax is being paid by the poor anyway is well-taken. Any money over $90,000 a year doesn’t pay towards it anyway.
I’m not the first to mention it, but I’m worried about what will happen as people move away from using gas to alternative sources of power. As usage decreases, revenue will go down, forcing an increase in the rate to maintain the same income. That would further decrease the usage, starting the cycle all over again. Gas use is notoriously unresponsive to price change, which might moderate the price spiral—but I wouldn’t bet the house on it, so to speak.
(The people who would really be hurt by this proposal are people who don’t pay taxes at all, but do buy gas; i.e. illegal immigrants.)
Heresiarch, many, probably most, illegal immigrants pay taxes, including payroll taxes.
http://www.truthout.org/cgi-bin/artman/exec/view.cgi/37/10128/printer
http://www.csmonitor.com/2002/0321/p02s01-ussc.html
The other point you make is a good one. Perhaps the solution would be to move to a system where Social Security was funded partly by a radically-reduced FICA and partly by carbon taxes? As the carbon tax revenue fell, the FICA rate could be increased. Better than getting rid of FICA altogether, which could make it difficult to reintroduce when necessary.
mds - hmmph. Can you switch to another electricity provider? Here in the UK we have the choice of several, some green, some not…
It’s a basically good proposal, and I like it–but I’d modify it a bit.
First, pickabone’s point is a good one–you have to look at the dynamic effects. The carbon tax will lead to substitution away from carbon-burning, so it’s not a good long-term source of SS funding.
Second, this does increase regressiveness–a household earning $90K pays twice as much SS tax as a household earning $40K, but probably doesn’t use twice as much fuel.
I would modify it as follows: keep the SS tax, but only on income ABOVE median income; this assures continuing funding of SS, and also makes the tax change less regressive.
The group this will really hurt is my people, the rural poor–for whom moving is often not an option (housing elsewhere is too expensive, and the support networks they have is where they live), and for whom even $20K a year is a high income.
Sam, are you sure a $90k household doesn’t use twice as much fuel? Might they, for example, have a bigger house that costs more to heat? Own an SUV? Or two? Buy more imported goods? Fly twice as often?
But your solution (keeping SS payments, starting above the median income) is a good one.
mds - hmmph. Can you switch to another electricity provider?
Alas, there’s the rub. The CT utility holds the utility on local distribution. Yeah, we have a choice of several providers, but they must all be funneled through the local utility. This is just like the telecoms, who hold absolute monopoly over “the last mile” of telephone wire, and are pushing to leverage it to hose all competition further (see Net Neutrality). All this is why, when Milton Friedman says that the only thing worse than an unregulated monopoly is a regulated monopoly, I reach for my revolver.
Oddly enough, thanks to a computer services advertisement, I’ve discovered that the UK seems to have quite the setup for choosing green energy. The content also led me to find that David Cameron is a proponent of green energy and fighting global warming. Don’t your Tories realize what “conservative” means?
Sorry, that’s “The CT utility holds the monopoly on local distribution.” Why didn’t the automatic preview start flashing wildly, preventing me from hitting Submit?
First VERY important note,
Miracle Max (of MaxSpeak) re-ran Nicholas’ numbers; they appear to be off by a factor of 1000. (I checked–I’m pretty sure Max is right).
Second, you can’t just figure gas costs–electricity costs would at least double as well.
Go back and look at the material I quoted in my comment. Consider whether I might actually have been addressing that one particular comment rather than giving unqualified support to a carbon tax.
Which unqualified support I do not, incidentally, give.
Yes a Carbon tax would not be painless, but when I see all of the efforts to carve out loopholes I see a plan that won’t effectively lower emissions. Cars are by far the biggest emitters, and almost everyone drives them, so everyone is going to feel a pinch there. Offsets and subsidies can ameliorate things, but the whole point of this proposal is to change the economy and change people’s habits, so those things will have to change.
I also think people are taking too much of our energy use for granted. People in the South survived without AC for centuries. A century ago, trains stopped at every town of any kind of size, one could ride street cars and interurban trolley lines from Maine to Minnesota. Our country has thrived without gasoline, and if we work hard at this, and rediscovery what previous generation knew about transport, homebuilding, etc., we can make this work.
Also, as Chris points out, gas prices are going to continue to shoot up until the stuff is gone, and countless countries already have gas taxes higher than what Gore is proposing. The carbon tax can work, but it needs to be accompanied by heavy investment in alternative forms of transport and energy. Rebuilding the rails seems like a logical first step.
Justin,
You are wrong on your facts. Cars are a relatively small proportion of emissions–the majority of CO2 emissions are from burning coal to produce electricity. Transportation in total is less than half of CO2 emissions, and my guess is that cars contribute a fairly small fraction of that (trucks burn more fuel per mile).
Remember–you can’t substitute coal (and that includes most electricity) for gasoline and come out ahead in CO2.
SamChevre, by autos I meant cars and trucks, and even at less than half, that’s still a huge chunk of the emissions. You’re right I overstated by saying most.
You’re right that substituting coal for gas will not get us ahead carbon-wise. Trains and trolleys and, to some extent, cars, can run on electricity (nearly half of Europe’s trains are electric), but if that electricity is produced by coal plants, we still have a carbon problem. That’s why we may have to consider ramping up not just renewables like wind and hydro, but, if we want to produce the amounts of energy our society needs, we’re probably going to have to look into nuclear plants (which might also produce enough hydrogen to make fuel-cell vehicles practical).
Can’t say I’m in favor of a “carbon tax” with the infrastructure (or should I say, lack thereof) we have now. First, we need to rebuild our light rail and interurban lines, and make them accessible—if not 24/7, at least 19/7 to accommodate typical work shifts. We also need to emphasize affordable housing in urban areas—the common belief is that yuppies are fueling all the urban sprawl, but in the midwest, there’s more working class people who have the longer commute, because it’s more affordable (or flat-out possible) to live in a smaller town and drive to the city (where all the jobs are) to work. Zoning has to be addressed; we need to have businesses situated back in neighborhoods, and jobs close to home.
A payroll savings of $300-500 a month isn’t going to do the person who has transportation costs go up by that amount or more any good. Most U.S. cities are not metropolitan urban centers, with the population density necessary to support a good public transportation system. We need a redevelopment program to make our cities livable for the future, and that has to be federally backed, the way the Interstate highway system was (is). First, let’s build what we need. Right now, the carbon tax would sink more folks than would swim by it. Hoping that unaffordable gas (hence, inability to get to work, hence job loss) would cause folks to lobby for better public transportation is a non-starter. Riots in the streets every day isn’t going to make those systems appear overnight. A long time was spent dismantling those systems back in the forties and fifties; it will take the same time to rebuild them.
My city gains and loses a population of 40,000 every day with commuters from surrounding smaller towns. When I say “surrounding smaller towns” I don’t mean in the immediate vicinity—I mean from a six county area. Most of those folks aren’t driving big-ass vehicles specifically because of the fuel inefficiency—but hybrids aren’t an option yet (long waiting list, high price). These aren’t yuppies; the yuppies live in the high-priced subdivisions and gated communities immediately outside the city limits. These are just plain folks; folks with limited choices.
And that’s what I see this argument being about—choices. Most of us don’t really have a lot of options when it comes to our carbon footprint. It’s all well and good to talk about taking the bus when you have the option of taking a bus. It’s easy to talk about insulating your home when you already live in an insulated home, or can afford a homeowner’s loan to have your home insulated. It’s easy to talk about walking to the grocery store when you live within a mile or so of a store. It’s easy to talk about choosing to live in a place where you can walk to the store, or childcare center, or school, park, bank, libary, etc., when you can afford the rent or mortgage payment to live in that sort of place. There’s a reason people aren’t making those choices, and its called limited income.