At first, this post by Philip Zelikow at Shadow Government seems like an odd construct: it's not everyday that you see a conservative intellectual all but concede the environmentalists point of action on global climate change by moving right along to the need for a tax on carbon emissions, based on EU and UN examples no less, and who cites ExxonMobil in support of his proposal!
When conservatives start agreeing to taxes of any kind it's time to read the fine print, and in this case when you squint you get this quote from Exxon CEO Rex Tillerson:
In addition, such a tax should be made revenue neutral. In other words, the size of government need not increase due to the imposition of a carbon tax.
This is likely to be the cornerstone of the Republican negotiating stance when it comes to the implementation of any carbon tax - that it be 'revenue neutral.' The GOP will never agree to vote to raise taxes, but they will agree to tax pollution - as long as it doesn't "increase the size of government." Why would they do this?
Because it's another freakin' wingnut boondoggle, as usual. And a fairly transparent one at that.
[from BlueBoxCar]
If a carbon tax is revenue neutral it means that moeny to pay for things like the defense budget, the CDC, the court systesm - things in the federal budget - will come from taxing gasoline, electricity generated by coal, and heating oil rather than payroll taxes and taxes on corporate profits. Not just in effect but in actuallity, this is a shift from a payroll tax to a consumption tax.
And who gets squeezed most by a consumption tax, particularly one on necessaties like transportation fuel, heating and electricity? Answer: People whose ratio of income to these costs is lowest. In English: Folks who spend a larger percentage of each paycheck on transportation, electricity and heating. Low income families. Poor People.
Conservatives will say that that everyone will pay the same tax, and that rich people will have to pay more due to driving bigger cars and having bigger houses to heat (yea, that'll play). But this is true only if it's an actual tax. If everybody has to pay, then people wasting more carbon energy on big houses will pay more, sure, but they will have incentive to use less and pay less. Also, taxes paid by low-income and no-income users can be re-funded not in tax credits, but actual rebates paid for by part by taxes on people with big houses to heat.
If it becomes a neutral proposition, however, than by definition there will be people who would be contributing little to nothing in the way of payroll taxes but suddenly find themselves under a burden by way of carbon taxes. If there are losers in a zero sum game, that means there are winners.
Who wins? Well that depends a lot on how and where in the income spectrum we cut the taxes to balance it out - so in a sense it's everyone who isn't poor. It's everyone whose ratio of income to energy expense is highest that also sees the biggest payroll tax-break. Upper-middle class to Rich People.
Another problem with this scheme is that the accumulated short-term burdons don't add up to a long term relief from our problems. People may try and use less carbon to save on taxes, but that may just end up in more people freezing to death in winter, rather than any long-term change in how we use energy. Dirty carbon energy produers won't necessarilly feel pressure because they will always pass taxes onto customers, and there will always be customers if they're the only game in town.
By using carbon taxes as an actual revenue source we could not only offer relief to those burdoned by the taxes, but would be able to fund infrastructure upgrades and green power plants and all those things we need to become both energy sufficient and cleaner in the future. Over time, as reliance on dirty power wanes, so too will the taxes collected on them. In other words, the greener we get, the less taxes we all pay.
Zelikow and his buddies at Exxon think we should shift the tax burdon from the rich to the poor (big suprise), and use the whole flim-flam as a PR stunt to portray our world leadership on carbon compliance. But by being responsible, and using a strategy that invests these taxes into our energy future, we will create a natural cycle where we actually pay for a cleaner tomorrow.