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Your Take: Tax Carbon Emissions?

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Imperial Gas PumpThis is one of the proposals economists love but politicians hate and we’re going to discuss their first proposal – eliminate the mortgage tax deduction. This proposal is pretty straight forward:

Tax carbon emissions. Yes, that means higher gasoline prices. It’s a kind of consumption tax, and can be structured to make sure it doesn’t disproportionately harm lower-income Americans. More, it’s taxing something that’s bad, which gives people an incentive to stop polluting.

It’s not clear how carbon emissions would be taxed but it appears that the main thrust would be adding a tax on gasoline to cover externalities. An externality is a cost or benefit that isn’t covered by price. With burning gasoline as a fuel, there’s a cost that you, as a driver, are not paying. Unlike a company that has to buy carbon credits to offset the pollution from their manufacturing process, we don’t have to pay a similar tax to cover the pollution from our driving habits.

I think the tricky part with taxing this is the implementation. A consumption based tax makes the most sense, add a tax to each gallon of gasoline, with the proceeds going to cleaning up the impact of that pollution. The problem is that a basic one would disproportionately harm lower income Americans because anything that taxes everyone equally would disproportionately harm lower income individuals. While I like the idea of a tax on pollution, I don’t think it’s an easy one to develop.

What do you think about taxing carbon emissions?

(Photo: robbn1)

{ 43 comments, please add your thoughts now! }

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43 Responses to “Your Take: Tax Carbon Emissions?”

  1. Traciatim says:

    A tax on air and life itself…. fantastic idea if you’re the one collecting.

    • Jim says:

      It’s not a tax on air, it’s a tax on people polluting the air. There’s a big difference, unless you just want to spin something to get people emotionally charged up.

      • Jim,

        Just like air, we pretty much need carbon based fuels to live. So it is like taxing air.

        • Bobby says:

          Investor Junkie –

          You going to pay for everyone’s chemotherapy when they get cancer from breathing the carcinogens your automobile emits?

          • knotReally says:

            actually we will. the socialized healthcare plan that was passed will essentially do just that.
            Although you could easily argue that our current system was essentially doing the same thing.

          • Robert says:

            That is such a ridiculous comment, it is impossible to even try to begin to tell you ignorant you sound with your fear mongering..

  2. knotReally says:

    Does a low income person filling up at the same station produce less emissions than a rich person?

    I don’t believe taxing will ever be the solution. However, if its going to be done on something that is equally accessed by all, equally tax it.

  3. Glenn Lasher says:

    No need. Just cut the subsidies for fossil fuels. The end result will be the same.

    • mannymacho says:

      Not really, because you can structure the tax so that it doesn’t disproportionately affect lower-income people, but you can’t do that if you end the subsidies. Besides, most subsidies in the US are based on oil production, not sales of gasoline – so they are not directly tied to emissions. But I think that all subsidies should be removed so as to provide a level playing field between fossil fuels and renewables.

      • Ray says:

        I’m sure its possible to structure the tax to avoid hurting low income people, I can’t figure out a perfect solution however.

        Do you tax everyone and allow those who keep their receipts to take deductions?

        A rather large majority of low income workers don’t take every deduction their entitled to and keeping all those receipts would be cumbersome.

      • Robert says:

        Are you an advisor to POTUS? Sounds eerily similar to his rationale.

  4. Aaron B says:

    Yes! (probably) I’ve read (long ago) about ideas for a carbon tax that involve at the same time reducing income taxes and/or implementing a prebate that refunds everyone some baseline amount. A carbon tax could theoretically allow us to do away with gasoline taxes, EPA fuel economy requirements, oils and ethanol subsidies, solar subsidies, etc., because it would steer the market toward cleaner energy at a fundamental level.

    • Steve says:

      It depends on how much the carbon tax is. A pretty good percentage of what we pay at the pump is going to these other taxes already, as there are other external effects besides carbon emissions.

      Purely guessing here, but I don’t think a hypothetical ‘fair’ carbon tax would be that much compared to existing gasoline taxes.

  5. Jim M says:

    More use of the tax code for social engineering purposes.

    • Steve says:

      It’s not social engineering- its accounting for externalities which the article makes pretty clear. But it’s not black or white either way- if they implemented a carbon tax which exceeded the actual ‘cost’ of negative impact of the carbon your car is emitting, you would have a point.

      Sin taxes are a better example of ‘social engineering’.

  6. Russell says:

    It might be easier to start by applying the taxes to electricity. It would be related to the utility’s energy mix between coal, natural gas, wind, solar, etc. It could also be tiered based on total use. Part would be paid by the consumer, part by the utility. This would both encourage people to use less electricity and encourage utilities to switch to cleaner sources of electricity.

    • Robert says:

      Now that will simplify things.. The geniuses that are enforcing the current tax code are so good, that they can properly implement this tiered obfuscation with great ease and efficiency, I am quite sure..

  7. JLP says:

    I’m 100% against a carbon tax. Higher gas prices? Please. Gas prices are high enough.

    Does this mean we have to tax cows too? Cows are a huge polution source with their flatulence.

    Finally, let’s face it: taxes wouldn’t really change behavior. Why? Because there are no other alternatives. Pay twice as much for an electric vehicle whose technology still isn’t proven (I’m referring to the Volt’s catching on fire).

    This is a dumb idea.

    • Bobby says:

      Gas prices are cheap as hell. Because the price you pay for gas doesn’t include the public health effects of burning those hydrocarbons, the future atmospheric effects, the effects of mercury (coal), all the oil spill cleanups, the permanent economic effects of those oil spills on said communities, the EXPENSIVE military (“defense”) presence in the Middle East to ensure “stability”.

      $4 is very, very cheap. We should be paying $6-$7 at least. Since we run deficits to pay for ALL of these expenses, we’re already levying a massive tax on future generations.

      • Robert says:

        Let’s raise taxes on everyone to keep the fires burning instead of cutting back on needless spending. Spoken like a true liberal..

        Egads.. What is up with that?

    • knotReally says:

      Whats up with the whole thing about cows being emitters? If you can make that arguement then you should tax all decidious trees as they drop a lot of leaves during a small window of time.
      Cows only eat things that take up carbon. since you can’t create/destroy matter then they are only emitting what they take on.

  8. I think taxing the carbon emissions is a good idea. It will force people to take public transportation, carpool. etc. I don’t think it’s the worst idea ever and it gives the government some extra tax income.

  9. Jay says:

    How about uncovering the technology patents the oil companies and other big entities have bought up to suppress competition. That’d be a good start. Also, who benefits from trading carbon credits? Who owns the exchanges? What interests are vested in the carbon scheme?

  10. huskervolleyball1 says:

    We are way behind Europe on carbon taxing. We need to find a way to cut down on carbon emissions and taxing may be the way.

    • Robert says:

      Just like Taxing cigarettes will cut down on smoking and improve our healthcare system..

      Have you noticed how things have gotten so much better.

      Any fool can see this is about a money grab more than it is about the environment. This is a man-made crisis that really has nothing to do with “fossil fuels” not exist.

      If the oceans rise, do yo think people will stand there and drown? or will they move inland?

      Wasn’t the earth covered in water before? weren’t the continents all one land mass at one time? Maybe “global warming” is the next step in the evolutionary process of earth? How about that??

  11. eric says:

    I would be interested in this. Would be curious how it can be structured to avoid disproportionately harming lower income families.

  12. Matt M says:

    Raising gas prices even higher would be brutal in this economy.

  13. freeby50 says:

    I’m going to set the ‘carbon tax’ aside and just say that I think we should raise gasoline taxes. Right now gas taxes only pay for about 50% of the cost of maintaining our highways. i think gas taxes should pay the full cost of our roads. Therefore : double the gas taxes.

    • Texas Wahoo says:

      But with the increase in electric/hybrid vehicles, shouldn’t we tax electricity (at least the electricity that is used to power cars) the same way? Those cars also need to pay their fair share of the cost of the roads.

  14. Mike says:

    Lol. Quit eating Big Macs people.


    According to the Food and Agriculture Organization of the United Nations (FAO) agriculture is responsible for 18% of the total release of greenhouse gases world-wide (this is more than the whole transportation sector

  15. thunderthighs says:

    Prove anthropogenic climate change to me first. Using real science this time.

    • Ben says:

      Materialistic existential environmentalism is the new state sponsored religion. You are not supposed to question it. If you do prepare to be labeled a neanderthal flat-earther.

  16. Anonymous says:

    More taxes on gasaoline? Then the price on EVEYTHING will go up. The cost of doing business for every business will go up. How do you think food and other products are delivered in this country?

  17. LibertyJoe says:

    Very bad idea unless you support Corporatism or the various wars and murder the US is engaged in. If you dont’t like energy, don’t use it. I prefer to have modern conveniences and the govt has no right to prevent me from doing so.

    Global warming is based on fraudulent science so don’t use that as your reason for taxing gas/carbon whatever.

  18. Bill says:

    No new taxes of any kind! We are strangling ourselves by our own hand.

  19. Robert says:

    As if taxing carbon emissions will magically clean the air. This is another farce and rip-off perpetuated by consensus and NOT science. If it WERE science there would be no need for a consensus. The FACT is, there are brilliant scientist on each side of the argument of the condition of air quality and greenhouse gases. From a PURE scientific perspective, it either IS or ISN’T man’s fault regarding this condition. Science does not allow for both. So until that is settled, it appears that it is a money grab by environmentalists and liberal politicians to fund their socialistic ideals

    • Ben says:

      If history serves we can be 100% certain that the revenue will not be used to clean the environment. It will instead magickally disappear into the black hole that is Washinton DC.

  20. Ben says:

    Bad idea but it is still a semi-free country. A fund should be set up at the IRS through which conscience stricken devotees of gaia may purchase indulgences.

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