Does The Covid-19 Pandemic Make A Carbon Tax More Likely?
recently said he views a deficit-reducing carbon tax as the only viable extra revenue source. The White House considered a carbon tax back in 2017, but it was primarily trying to find a way to pay for a reduction in the corporate income tax rate. The Tax Cuts and Jobs Act reduced the corporate rate without implementing a tax on greenhouse gases, and that seemed to be the end of the road for a carbon tax for a while. It’s back on the table now because of the economic damage caused by the coronavirus pandemic. The fundamental problem with a carbon tax is essentially the same: It raises revenue, but at the cost of increasing consumer prices, while not necessarily stemming pollution substantially. The regressivity of a carbon tax, even one that includes a partial rebate, is a big problem given the particularly harsh economic impact of the coronavirus on taxpayers with smaller incomes. Carbon tax discussions rarely seem to mention that a better approach would be to convince Americans of the benefits of environmentally friendly choices, rather than to tax greenhouse gas emissions. The ecological damage of modern life is real, and it’s a problem for humans now and in the future, but tax isn’t an ideal solution. The best strategy is to appeal to reason and self-interest to persuade people to stop polluting, not to inure them to a little extra pain at the cash register. So go buy native flowers and find them a suitable spot in the garden. You’ll make the native pollinator population much happier (turf grass is useless to bees and butterflies); you’ll improve the aesthetics of your neighborhood (no one honestly believes that turf grass is either interesting or beautiful); and you’ll reduce the need for a carbon tax (or at least help forestall further discussion until the next recession). This article appeared on the Forbes website at https://www.forbes.com/sites/taxnotes/2020/05/28/is-a-carbon-tax-coming/#fff241958763]]>