Even if you tax the industries, the increased cost will eventually make its way to the consumer.
I think the general point is to replicate something like the cigarette tax. The tax is supposed to be high enough that people will seek alternatives. I’m not sure what alternative you can use if you live in a rural area with no public transit, with electric vehicles not yet being cheap or popular enough. It would work great where I live (a big city, where few of my friends own cars).
Directly taxing the taxpayer, or taxing the oil producer, would have the same result; a higher cost, unless the taxpayer can choose another option.
This wouldn’t really work well with the attempt at tax neutrality. Suppose the government increased its revenue with a carbon tax amount of X. They reduced income tax by the same amount, X. But now the tax is working, and people reduce their oil and gas consumption. Now the government has less money. The cigarette tax doesn’t pretend to be revenue neutral. It’s specifically about getting people to stop using a product, and if people continue to do so, the government gets money. Said money might be earmarked specifically for fighting cigarette addiction. I really think a carbon tax needs to go down that route. Said money could be earmarked on researching solutions, or at least on subsidies for renewable energy generation.
That’s not true. Excise taxes don’t increase prices by the amount of the excise tax. If industry could charge 5% more for their product, they would. Prices are designed to maximize income and take into account what the market will bear. The reason industry will do whatever they can to block an excise tax, even if it means that their product is instead hit with a higher sales tax rate is that they end up eating the excise tax. In many states, the alcohol excise tax, which is typically charged on gallons, so has no bearing on price or inflation, hasn’t been raised in decades, but increased sales tax rates on alcohol have been enacted.
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True, this is probably one thing that makes things particularly politically difficult. But if it is actually true that poor rural people would be paying more than rich urbanites under a carbon tax, doesn’t that mean that they ARE the ones who should be making more significant lifestyle changes to lower their carbon footprint? Whether that involves moving to the city, switching to a more fuel-efficient vehicle, or raising the prices on whatever they sell. Some amount of pain is inevitable - but if done gradually people should be able to adapt to the new norm.
Does everyone use the same amount of electricity? The whole idea is that you get your $100 cheque every month, but that amount you pay in taxes depends entirely on you - cut back your electricity usage, and you can be paying $80 per month while still collecting the $100. Pretty simple to me.
That’s right, it disproportionately benefits people who don’t have much carbon footprint, which is entirely the point! Which, incidentally, should be poor people on average, as the cite I linked to before shows that rich people have larger carbon footprints than poorer people. Will some poor rural people be disproportionately negatively affected? Quite possibly - and if it is the case, that is the very price signal that the tax is meant to communicate. Hopefully, your society’s safety net will be able to help keep these people afloat and transition to lower-carbon lifestyles. Again, the tax should be introduced gradually to ease people into making these transitions.
There’s no one right answer, but it could involve them also moving to the city, raising prices on what they sell, etc. Perhaps a lower-carbon future means that only rich people will be able to afford to live in rural areas. And perhaps this helps explain the average person’s resistance to wanting to move towards a low-carbon lifestyle - they don’t want to change what they are doing. Understandable, for sure. But it’s not necessarily a given - perhaps it will turn out that the market will support higher food prices and enable farmers and ranchers to live a lifestyle similar to what they are doing now, and carbon reductions will be made mainly by city dwellers who cover the costs of higher food prices by traveling less and using more efficient transportation. The elegance of the broad based tax/dividend scheme is that nobody has to try to figure out which outcome is more efficient - the market will help determine that.
This is why I’m in favour of just cutting a cheque to everyone - if carbon emissions go down, then the dividends go down, but it doesn’t affect the government’s bottom line in any way. As the dividends go down, people who may have been using the dividends to sustain a more carbon intensive lifestyle will continue to be pressured more to find ways to reduce their carbon footprint. I am definitely supportive of incentivizing new technology development and renewable technologies, but subsidies always have the potential issue of having to pick winners and losers (ie. you might sink a ton of money into cold fusion, and it turns out that we are never able to surmount the engineering challenges, in which case that money is wasted). Nevertheless, putting some of the tax towards subsidizing renewables and low carbon tech is likely a decent idea because if carbon emissions decline and tax revenues decline, that should suggest that we don’t need to spend as much money on subsidizing renewables anymore. Still, with a straight tax-and-dividend model, with taxes appropriately high, renewables should have a significant competitive advantage over fossil-fuel based energy sources anyway, so a subsidy is not necessarily needed (I understand that R&D for new technology could still use some up-front infusion of capital that might still not be available under a pure tax-only-no-subsidies regime, so that should be considered).
Sure, but at least some of the tax should cascade down to higher prices, especially since this should be applied on a very broad basis. If prices aren’t changing, then how will people know what are the carbon-intensive things in their life? The whole point of this tax IS for the costs to be passed down to the consumer, so that they can adjust accordingly to lower-priced, and thus lower carbon footprint goods and services. Fuel SHOULD be expensive to entice people to carpool, use public transit, fly less, buy local, etc. Perhaps there are some really non-obvious things that have high carbon footprint that people would be just fine cutting out of their lives - if they knew about it. Otherwise, the idea is that the tax should cause everyone a bit of pain, which can be lessened by making choices to lower your carbon footprint.
Sorry post snafu
The following comment appears to be directed at me:
What??? I support a carbon tax BECAUSE it is a libertarian solution. What made you think otherwise? Do you think everyone who supports libertarian thought is a fanboi of Ron Paul and Alex Jones?
And where did I link such a tax to “social justice”?? 
What I DO believe is that a gasoline tax, in isolation, would make net taxation in the U.S.A. even more regressive than it already is. A serious carbon tax proposal would have to be designed NOT to steal further from the needy. OK? My proposal is very simple and easy to implement: Remit the first $X of each worker’s annual SocSec tax. To avoid confused digressions into “revenue non-neutrality”, I set $X to balance the carbon tax.
But since you bring up the term “revenue-neutral”, perhaps we need a new thread to discuss why that very phrase has now become hate speech! Was Trump’s trillion-dollar tax cut “revenue neutral”? Of course not! Increasing federal debt was a major purpose of that tax cut. Was the insane war in Iraq “revenue-neutral”? Are the lush defense contracts to Lockheed Martin and General Dynamics “revenue-neutral”?
… Yet if a rational thinker proposes a new tax to offset the trillions of debt … that’s condemned as not being “revenue-neutral”?? :smack: Give us a break.
Apologies for misinterpreting your post as snark - it is just pretty rare for anyone on this board to refer to something as being libertarian with positive connotations.
You may be interested to read this paper about the expected impacts of different schemes (also summarized by Vox). A per-capita refund/dividend will actually result in a net reduction in tax burden for the poor (with significant improvement for the lowest quintile), but also has the most dampening effect on the GDP (~0.4%reduction per year per this paper), while payroll tax reductions primarily benefit the middle class but could potentially have a positive impact to GDP. Deficit reduction ends up being more regressive than either option.
I thought about who would be hurt by such a tax and thought of the Alaska Example.
Alaska, being a mostly frozen wasteland of low temperatures, little sunlight during parts of the year, and large distances between towns, is a place where you need a shit-ton of fossil fuels. For heating, for most of the industries based there, even to get around you frequently need to fly in small inefficient planes. So the carbon tax would cause all the residents of Alaska’s costs to skyrocket, but they would not receive any more than any other USA adult when the refund is issued.
But then I realized that this tax incentivizes the residents of Alaska to move where it’s warmer and they can live more efficiently, which is working as intended.
But then, what about people who make their careers specializing in oil extraction in low temperatures or fishing or whatever other industries are in Alaska. Since the price of fuel would increase, and since alternatives work poorly in such extreme conditions (batteries don’t work as well, solar panels don’t work as well either…though a quick Google search says that wind power works extremely well), some of them would be out of work.
But so what? Ultimately any change to the laws of the USA is going to hurt some industry. Individual companies rise and fall all the time without the government doing anything. Ultimately, adults who stay employed have broadly marketable skills.
The US should probably have free vocational training, where the training is specific to whatever skills are presently in demand (government doesn’t pay for just any training, only the training that’s cost effective and has a high success rate) anyways.
For the libertarian and conservatives among us, perhaps that training should be calibrated to make sure that the average recipient will statistically pay in more in extra taxes than the training cost.
Don’t refund to the populace. Instead, put directly in basic needs that poor people need, such as public health care and food security. This alleviates the problem of poverty.
One problem is that significant aspects of manufactured goods and even mechanized agriculture involve fossil fuels, such that a broad-based carbon tax will also lead to price increases for basic needs.
One can debate about why it’s not more common, but it’s certainly doable and it’s been done:
One key component of the federal carbon tax is that it’s revenue-neutral, similar to the policy proposal from Citizens’ Climate Lobby. All the taxed money will be distributed back to the provinces from which they were generated. The provinces will in turn rebate about 90% the revenues back to individual taxpayers. The rebates are anticipated to exceed the increased energy costs for about 70% of Canadian households.
I don’t disagree but perfect is the enemy of the good.
I oppose it because big government has no damn business trying to social engineer our lives like this and it’s likely to cost me a huge amount of money.
Government needs to stick to defending the country, locking up criminals, and patching potholes rather than vacuuming money out of some people’s wallets and discharging it into other people’s wallets.
I’d reckon most people on the right feel likewise.
Keeping the environment from becoming unlivable is defending the country.
So right now, the government has a lot to say. It requires appliances and automobiles to be a certain minimum level of efficiency. It banned the incandescent lightbulbs. There’s an effort to fight phantom power draw. There’s hundreds and hundreds of other laws and restrictions I don’t know about.
The basic idea of the carbon tax is you apply it at the highest level possible. Probably right at the refinery level or the natural gas distribution level. Basically, the moment a fossil fuel is committed to a path where it will eventually be burned, you make that massive corporate entity actually write the checks. (they are obviously going to pass the cost on down the line)
This makes the tax fairly straightforward and cheap to administer. And in turn the refund is also pretty straightforward, given the same way tax refunds are.
This is really efficient and elegant. The government won’t have to require you buy an efficient car - your wallet will encourage this for you. It won’t have to encourage you not to fly unnecessarily, the ticket prices will tell you this for you. It won’t have to force you not to buy incandescent lightbulbs and live in an inefficient home - that power bill is how you know you should consider this.
Also it creates incentive for more innovation, there are likely all kinds of even more efficient products we haven’t ever considered because fossil fuel energy is so cheap.
Also, in the short run, windmill driven power will suddenly be hugely cheaper than everything else. And battery electric cars will be a no-brainer.
Why do you think the carbon tax will cost you a huge amount of money? Do the other people’s lives you are affecting with your pollution have no value?
This is two unrelated issues, and also a good way to lose the support of the middle class.
Sorry, what are the two unrelated issues. And doesn’t alleviation of poverty lead to the rise of a middle class? That’s what happened globally.
You’re assuming for some reason I think the government has any damn business telling me to use those horrible LED light bulbs or drive microscopic clown cars. I do not.
There’s no distinction between passing a law saying I have to drive a microscopic clown car and making spacious, comfortable capable cars so expensive I have no choice but to “voluntarily” drive one. Or use those horrid 80-93 CRI, not very dimmable LED builbs instead of 100 CRI fully dimmable incandescents.
Because I like living a modern, comfortable, all-American lifestyle, not a lifestyle like a caveman in the stone age that the environmentalists want me to live.
This is an honest question: do you feel any responsibility to consume goods and services in a responsible manner?
For example, let us say that you knew that your purchase of gasoline from a particular station would have you funneling money directly to Osama bin Laden’s coffers. Or, you’re looking for a new gun for home defense, but the store giving you a great deal is also selling weapons to Mexican cartels.
Would you say that such purchases would not be harmful on their face, and that since you are just one of so many others buying those goods, you aren’t actually contributing to any problems in a measurable way?
Or would you find that it would be unethical to do business under those circumstances, regardless of how little your money means in the big picture, and seek alternatives?
Or maybe you just prefer not to think about it, so you will just do what you want because it serves your interest, and critics are just overthinking things?
Again, honest questions. I’d like to understand how you think about such scenarios.
You think 93 CRI is even perceptible? I suspect you couldn’t tell in a “blind” A:B test. I don’t personally notice a difference.
As for the dimming problem, they have a solution for that. Smart bulbs. Those dim better than incandescents ever did with the wall dimmer switches. (and no, you don’t have to use a voice listening device like Alexa to control them, you can use a phone or wall mounted dimming control. Just pretty fucking convenient to say “Alexa, turn the lights to 20%” and it works immediately and reliably without having to get up)
What you are calling an “All American” lifestyle isn’t a god given right. Only you and your immediate ancestors (boomer parents) are the only members of humanity to ever enjoy this lifestyle in significant numbers.
I assume you are talking about a 5000+ square foot cheaply build “mcmansion”, with low efficiency central air conditioning that used ducts, with lots and lots of leaky windows and thin walls with fiberglass batting insulation that also leaks. And a couple of big pickup trucks and an SUV parked in front.
You know, an enormous fucking brick of metal that gets under 15 mpg that you use to commute 2 hours each day back and forth to work because you need a fuck-ton of land to even fit all those mcmansions so the city sprawls out 60 miles. And when you’re commuting the only thing the truck is carrying is your overweight self and maybe a briefcase.
You seem to react rather emotionally to even the thought of anything less. I guess you’d rather be dead than live in a 2k square foot house or apartment, eh? One with ductless “european” style AC. In a higher density city where most of the transport is electric buses, electric bikes and scooters, and electric taxies. Like, uh, China is doing really rapidly.
Most of the world lives like this, including tons of first world countries. And those people seem pretty happy to me. You don’t need “All American” inefficient things to have a happy life and it seems to have serious environmental consequences.