"The Get America Working! approach would work, in effect, by correcting a major price distortion. The current U.S. Internal Revenue Code taxes employment far more heavily than it does the use of natural resources. This distortion has grown progressively worse as payroll taxes have grown. Revising this distortion would increase employment, equity and overall economic vigor importantly. And it would do so by responding to market price signals, not through clumsy and expensive government interventions."
Back to the Future: The idea of a carbon tax, proposed by Al Gore 17 years ago, is winning new converts.
Date:
Mon, 12/14/2009
Source:
Newsweek
With the clmate talks underway in Copenhagen, Eleanor Clift writes, "... there is a new sense of urgency that action must be taken to address what the weight of scientific evidence suggests is a deadly warming caused by human greenhouse-gas emissions, primarily carbon." However, she notes the idea of "cap-and-trade" is too complex and too related to Wall Street and credit default swaps, so a Plan B is emerging -- the idea of a carbon tax. However, the tax would be offset by reduction in other distortionary taxes. Clift adds:
"The Climate Task Force plan would couple a carbon tax with a cut in the payroll tax. As [Climate Task Force Co-Chair] Elaine Kamarck explains it, the goal is to reduce greenhouse gases, not make the government richer or the people poorer. And since the payroll tax is regressive, and rich people have an infinitely bigger carbon footprint, they would end up paying more, which seems only fair if you compare people with several cars and a speedboat to those who ride the bus to work."
Al Gore, who proposed a carbon tax cut in his seminal 1992 book, Earth in the Balance, calls this idea "Tax what we burn; not what we earn."
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