I know some will answer that the government thinks that taxing like they do will curb or deter companies from polluting but it just seems like this is not the reason behind the tax.
Simply paying our government for pollution does not “save our climate”. It seems like if our goverment really sees this as a problem they wouldn’t be taxing but just simply putting a stop to it. It really just seems as though they look at this as a money maker. And yes, as a republican I do think Bush was wrong for this also.
These companies simply just pass this cost down to the consumer. This is always negative.
I was also wondering what people were thinking about this new energy bill that might pass. People are saying that energy users will be paying just over $3,000 more a year. The predict over a million job losses due to this tax. Why is this even in consideration?
It just seems like whether it is Obama or any other politician, they have this excellent tax game going on. During his campaign, I think he promissed a tax break to like 95%(If thats not the number I am sure I will get slammed but it was something like that) of working people. This might be true in the future, but we are begining to see where they will make this up. This way of getting money is an easy way for our goverment to hide from who’s really charging who. If they were to simply take it out of our check, it is easy for us to get mad at the government. Taxing these companies only results in less consumption and job loss. IMO:rolleyes:
If the energy companies pass along higher rates to consumers, do you think consumption of energy will go up, stay the same, or go down?
Also, if purveyors of alternative energy technologies are able to provide power without paying a carbon tax, do you think they will be more likely to succeed, just as likely, or less likely to succeed in competing with “old energy?”
The problem is that we can’t just “put a stop” to carbon emissions, because that means making it illegal to breathe.
We’re going to have carbon emissions, and carbon emissions are not necessarily a problem, the only question is what level of carbon emissions do we want. Do we want more than we have now, the same, or less, and if less how much less? And if we want less, what are the economic effects of emitting less? And what are the economic and ecological effects of any chosen level of carbon emissions?
We have a pretty good idea that it would be better if we emitted less than we do today. But we can’t emit zero. And so a tax on carbon emissions is a way of discouraging but not prohibiting emissions. Note that “cap and trade” is a more complicated way of trying to do the same thing, the only problem is that a direct carbon tax seems to be politically impossible, and so we have to make do with a stupid kludge.
Carbon taxes have the benefit of discouraging the production of an economic bad–CO2 dumped into the atmosphere–that is currently free. And they also raise money for the government, which means we can then choose to either increase spending, lower other taxes, or pay down our debt. And a carbon tax discourages fossil fuel consumption without directly subsidizing other forms of energy, it leaves that to the marketplace. Win-win-win.
That number appears to come from a press release from the National Republican Congressional Committee, citing a study conducted at M.I.T. Here (warning: PDF) is the reply from one of the authors of the study, saying the correct value is $340, which includes not just energy cost, but cost of goods and other effects.
The basic idea is that the government knows we need to reduce carbon emissions, but doesn’t know what the best way to do that is. By putting a dollar value on emissions, they’re opening it up to everyone in the country to figure out ways to reduce emissions, and rewarding the ideas in proportion to how good they are.
It’s only carbon from fossil fuels that is a problem. No one is even considering any sort of control or tax or anything else for carbon from breathing. Anyone who is saying that is simply doing their best to scare people, and is being utterly ridiculous.
Cap-and-trade is not necessarily a tax. If the government doesn’t charge companies for their initial allowance of emissions, but simply tells them how much many allowances they have, no money goes to the government. Hence, it’s not a tax of any sort. If MegaCorp currently emits a million tons of CO2, and under the cap-and-trade law, they can only emit 750,000 tons, then they will have to invest money either to buy allowances from someone else or to find ways to reduce their emissions. This will certainly be a cost they didn’t have before, and we consumers will have to pay more for MegaCorp stuff. But it’s not a tax. On the other hand, if the government says we’re going to auction off all the available allowances (which is the proposal in the current energy bill), then it is a form of tax. But the impact can be offset by using those funds to reduce other taxes, which has been proposed.
Carbon taxes have the advantage of setting the price of control, but the disadvantage of only getting as much reduction as can be achieved at that price. Cap-and-trade has the advantage of setting the amount of CO2 reduction, but the disadvantage of not knowing what the price of that reduction will be.
Finally, it’s unclear what the impact on jobs will ultimately be. I haven’t read the studies on this, but I know there will be winners and losers. Right now, the potential losers are screaming about how bad it will be. The potential winners are being quieter, but certainly pushing their interests.
The technical economic statement is that there is currently an “externality”. E.g., when you go and fill up your gas tank and drive your car, you are putting CO2 into the atmosphere that has an effect on everyone else. The idea that a good is priced in the most efficient manner in a market economy relies on the assumption that all the costs are borne (and all the benefits derived) by the buyer and the seller. When there are additional costs to 3rd parties, the good will tend to be underpriced because neither the buyer nor the seller is properly accounting for these costs.
One solution is to tax the good so that the price is higher. Another solution is to regulate emissions. However, the most efficient market-based way to regulate emissions (in the case of a substance for which we only care about the total amount emitted and not where it is emitted) is through a cap-and-trade system so that companies who can reduced their emissions in the most cost-efficient manner can then sell their allowances to companies for which such reductions are more costly.
Thanks Robot Arm for that excellent link (which bears repetition) to a letter correcting the complete disinformation that the Republicans have been putting out about the estimated cost of the cap-and-trade bill. One would hope that the Republicans, now having their mistake explained in gory detail to them by one of the study authors, will no longer continue to bandy about this $3000 figure. Alas, that may be too optimistic!
At one level, C&T is an attempt to make non-carbon or less-carbon intensive energy technology more viable by making the carbon-intensive stuff more expensive.
And while C&T isn’t a direct tax, the additional costs due to government-imposed C&T will, with certainty be passed on to the consumer - in the end, consumers pay all of the costs of government-mandated spending, be it tax, regulatory cost or C&T.
It might not be an official tax, but it is a mandated government consumer expenditure, which walks, flies, eats, quacks and shits like a tax.
A C&T is designed to punish the consumption of carbon-based energies. If one argues that a C&T is designed to “encourage investment,” one would need to account for the need for a careful control of C&T revenues to require the appropriate use of C&T funds.
The net impact of C&T will be that of adding another layer of cost to the consumer. call it a tax, an investment, whatever. A C&T is a sort of environmental VAT - to be added when companies exceed their government mandated levels of use.
You do understand that emitted pollution costs the entire citizenry, not just the consumer, in the long run, don’t you? Health care costs, cleanup, global warming damage, financial loss due to early deaths or disabilities, and so on. The pollution cost is already passed on to others – formally taxing it just establishes it as a visible, upfront cost instead of a hidden, long-term cost. And it might direct some of those costs to actual users and not just “everyone who breathes,” which seems slightly more fair.
I probably should but I havent researched figures but have all these effects been proven? Talk about health problems? Why are cigaretts legal? Why doesn’t our government try to figure out a way to eventually end smoking? I know why, they make too much money from cigarett sales. Almost weekly we find out that global warming isnt all we make it out to be. Why do people in rural areas live as long as people in atlanta or houston in which these cities have the highest pollution, smog or whatever you want to call it levels?
I hope everybody is right on here. I am all for cleaner cheaper energy, but to cause people to pay more for this agenda especially in these economic times. People have a hard enough time paying bills right now and to make it even worse? This is ludacris right now.
It just seems to me that the government plays us on these matters. I mean they give us a break here but take your money there, they take our money there but give it back here. It is all about getting elected and how good they can look. There is not one day in the future where we will give the government less money, it will only continue to increase overtime. Republican or Democrat.
For 2001-2002, the total costs of EPA regulations were estimated to be $192 million, with benefits of between $913 million and $4.8 billion (same source as above).
These figures are from OMB under President Bush. The office was no friend of EPA and EPA regulations, so these numbers are not inflated to push some liberal agenda.
You may end up paying more for cars, electricity, and gasoline, but you end up paying less for health care and to cover the costs of replacing someone who dies before they otherwise would have because of air pollution.
Some very strong arguments can be made that the time to change our energy system is now, precisely when the economy is down. Costs of construction are reduced, more jobs are needed, and we should invest in approaches that make our energy system more efficient in general. All of the things that should be done as first steps in reducing CO2 emissions - greater efficiency, investing in renewable energy, and improving our transportation system - are things that we need to do anyway, and most (if not all) of them will end up saving money.
Finally, comparing cigarettes and air pollution carries one major difference. Those who are affected the most by cigarettes are imposing that upon themselves - I acknowledge the arguments about addiction and second-hand smoke, but won’t get into that issue here. Those who are affected most by air pollution have no control over the air they breathe, unless it is through regulation on a broad basis.
As **jshore **points out, pollution is an externality. When you create unrestricted pollution, you basically force other people to subsidize the cost of your operating your car, your appliances, etc. They don’t pay in money, necessarily, but in the form of asthma, bronchitis, COPD, pneumonia, and early death. The idea behind cap and trade is that pollution costs should be internalized–the price of the gas you buy should reflect not just the cost to produce it, but also the additional costs borne by society when you burn it (and for the pollution created in its production). Otherwise, the cost of products like gas and electricity is artificially low, production is artificially high, and everybody pays in the form of air pollution and its consequences. Wikipedia has a lot of citations on the health effects of air pollution. As usual, some seem dodgy, and some quite respectable. But it seems undeniable that air pollution causes hundreds of thousands of premature deaths each year.
Yes health effects have been proven (see the post above mine for one cite). Quantified, not always, but proven, sure.
Government ending smoking – I’d say they are trying to go that way down a long slippery slope, but that’s really a different argument.
Rural lifespan = city lifespan? Can you cite that? Regardless, city pollution probably falls outside cities too – I know US industrial and powerplant emissions cause a lot of acid rain in Canada. Should Canada bill us to recover these costs?
Ludacris is a rapper.
I am not unsympathetic to complaints about the rapaciousness of government, especially after having been forced this year to report as income a refund I got on my state taxes last year – money that was already earned and taxed and then remitted to me shouldn’t count as income in the following year and get taxed again, should it?
But realistically we are definitely paying lower taxes now than in the past – if you go back far enough.
In medieval times, the nobility would simply take all your property they could find, sometimes several times a year (not on a set schedule) and spend it on anything they pleased. Barbara Tuchman’s book A Distant Mirror contains chilling accounts of the governing class repeatedly plundering lower-class citizens and wasting the money on lavish parties and gifts to impress foreign leaders, then sacking the towns that resisted repeated taxation and putting the citizens to the sword.
We definitely are being taxed now and it will probably get worse in the immediate future, but it has gotten much better than it once was, so I think the assertion “it will only continue to increase overtime” is clearly untrue. In our own time it was reversed when Reagan took office and shifted a lot of costs away from taxation and onto the poor and the politically powerless, so there’s always hope!
Missed the edit window. I dispute this claim – sure, almost weekly, some critic says global warming isn’t what we make it out to be, but those critics hardly ever have any scientific backing, and turn out just to be emotionally or financially opposed to global warming theories. What we actually scientifically find out about global warming is getting worse all the time.
Health issues are health issues, this is not a different argument. Cigaretts cause major health problems that actually, unlike pollution, can be directly linked to smoking and second hand smoke. This should be the top of the list of things to take care of if we really and truely are trying to help with health care costs and the general well being of citizens instead of my initial argument, greedy slumbag rich boys making more money for themselves.
And when I was talking about taxes, I am talking about America. Not what you brought up. If you go back to the begining of this country, percentage wise we only increase in what goes to the government.
I’ll add that the allowance market system for SO2 and NOx has worked very well overall, and has the support of industry and government both. CO2 (as well as mercury) would be a very natural extension to such a market. However, I will confess that the volatility in the allowance prices really makes for some unholy hell for trying to plan what the best compliance strategy is. I won’t go into it, just take a look at the last 5 years prices of NOx and see what I mean. Clients of mine struggle very mightily with the decision of “SNCR/SCR/buy allowances/reduce generation”, and we end up developing enormous sensitivity curves and optimization schemes, all of which become obsolete within a year. It would be nice if there was some sort of price stability factor to whatever CO2 cap and trade plan makes it into law.
This is a bit of a hijack, but I will just point out that I don’t think the money is being taxed twice. If you work through how that entry gets counted (which probably is easier if you do taxes the old-fashioned way using the tax forms rather than with a tax program), I think you will find that the refund is only taxed in the end if you deducted what you paid in state income tax the previous year from your previous year’s federal taxes. In other words, it is there to prevent you from, say, (either accidently or purposely) overpaying on your state taxes so that you can take a larger deduction on your federal taxes and then never having to correct it for the refund that you receive on those state taxes. I.e., they just want to make sure that the tax deduction you receive for the state income tax you pay is on the state income tax that you actually ended up paying in the end.
First, we’ve already give you cites that air pollution causes health problems and premature deaths. Why do you continue to claim that there is no link, though you haven’t addressed the evidence?
Second, perhaps you could explain how cap and trade is supposed to make money for politicians.
Well, I didn’t deduct state income tax from federal taxes in the first place, as far as I know.
I’m talking about it this way: in 2007, The Very Big Corporation gives me $100. The feds tax me on that, the state taxes me on that. I send in my income taxes for 2007 on April 15, 2008.
Then the state gives me $25 back in “overpayment” in June 2008.
In 2009, when preparing my 2008 taxes, I list that $25 state refund as income; it’s already been reported to the feds by the state.
The feds happily tax me again on that income (increasing my taxable income by $25).
That $25 portion was taxed in 2007 when it was earned and again in 2008 after it was returned to me.
That’s a really good point that I haven’t seen addressed before. The externalities that a cap and trade plan are designed to factor in to market prices don’t fluctuate at anything like the rate at which a price on the market would fluctuate. Would a bottom-floor price on the market be sufficient to provide price stability, or would some sort of constraint on the soeed of trading be necessary? Would we even need some sort of price cap?