Carbon Tax – “The Most Sensible Tax of All”?
Last Wednesday, Independence Day, two authors, Yoram Bauman, an environmental economist and fellow at Sightline Institute in Seattle and Shi-Ling Hsu, a law professor at Florida State University who is the author of “The Case for a Carbon Tax” published an Op-Ed in the New York Times.
We question whether it is the most sensible tax because of our familiarity with James Hansen’s fee-and-dividend approach to reduce carbon emissions. While similar to Mr. Hansen’s concept, a carbon tax may be sensible, but it would be up to We the People to ensure that our citizen voices were heard as it was implemented and assessed in a way that achieved clean, renewable energy and carbon neutrality goals. A tax certainly seems to be a more transparent policy when compared and contrasted to a cap-and-trade model. However, is the fee-and-dividend action in the public interest the least opaque?
The authors highlight the following:
- The carbon tax in British Columbia is a substitute for other taxes.
- Takes the place of payroll, business, investment and employee taxes.
- Preliminary data show greenhouse gases have been reduced 4.5% in the four years since the inception of the tax.
- This despite increases in population and GDP.
- Gasoline sales down 2% since 2007.
- 5% increase over same time period across the rest of Canada.
- Non-partisan policy that has aspects that both Republicans and Democrats favor.
- Tax breaks for both high and low income populations.
- Families, businesses and industry could control the amount of carbon tax paid by reducing their carbon footprint.
- Promotes energy conservation and investment into productive economic activity.
- Moves economy away from consumption and borrowing toward saving and investment.
Mr. Hansen’s fee-and-dividend approach: http://www.columbia.edu/~jeh1/mailings/2010/20100112_PeopleVersusCap.pdf
The British Columbia Ministry of Finance Carbon Tax Review and Overview: http://www.fin.gov.bc.ca/tbs/tp/climate/carbon_tax.htm