Feed on

I’ve long been in favor of instituting a carbon tax coupled with dollar-for-dollar reductions in other taxes.

I’ve also long argued that this is a pipe dream. It’s not just that any reasonable climate agreement is far off, it’s rather that the offsetting tax reduction part is as likely to happen as Massachusetts is to become a red state.

Here is a little explanation from the Master Resource:

For the United States, the maximum carbon tax level is $223 per ton of CO2. A revenue neutral carbon tax is therefore theoretically possible, though it would require carbon taxes equal to about two-thirds of all tax revenue, which is approximately the same as the entire income tax. Given the regressive nature of carbon taxes, it is unlikely that completely replacing the income tax with a carbon tax would ever be politically achievable.

Do read the whole (short) piece.

Leave a Reply