Comment by MostlyStable
1 day ago
Example #5621 that a simple carbon tax would be miles better than the complex morass of regulations we currently have.
1 day ago
Example #5621 that a simple carbon tax would be miles better than the complex morass of regulations we currently have.
That's overly reductive.
1. Poorer people tend to drive older vehicles, so if you solely encourage higher fuel economies by taxing carbon emissions, then the tax is (at least short-term) regressive.
2. You can work around #1 by applying incentives for manufacturers to make more efficient cars should lead any carbon tax
3. If you just reward companies based on fleet-average fuel economy without regard to vehicle size, then it would be rather bad for US car companies (who employ unionized workers) that historically make larger cars than Asian and European companies.
4. So the first thing done was to have a separate standard for passenger vehicles and light-trucks, but this resulted in minivans and SUVs being made in such a way as to get the light-truck rating
5. We then ended up with the size-based calculation we have today, but the formula is (IMO) overly punitive on small vehicles. Given that the formula was forward looking, it was almost certain to be wrong in one direction or the other, but it hasn't been updated.
All carbon tax is inherently regressive but that's also trivially fixable. Make it revenue neutral and give every citizen a flat portion of the total collected revenue. Bam, it is now progressive, since on average richer people will spend more on fuel (and therefore the tax) even though it is likely a much smaller percentage of their spending.
Every single one of your ideas has problems that are solved by a carbon tax. Taxes are simple, they accomplish what you want, and they don't have loopholes. A carbon tax will _never_ have the unintended consequence of making emissions worse. Many of our current regulations, including the one I was responding to do exactly that because they actually cause people to buy larger trucks than they otherwise would with worse fuel efficiency.
A carbon tax might not on it's own be enough to solve the problem (especially if you set it to low), but no matter what level you set it, it will help. Thanks to unintended consequences, many of our current regulations are actively counter productive, while _also_ having negative economic and other costs.
All costs are regressive to people with less ability to bear them. By making them not regressive we don't change behavior! It doesn't matter if they're regressive if the objective is to get people to not drive or to burn less gas. Shifting the cost to the rich doesn't change behavior and it doesn't reduce actual carbon. There's a lot more low-income emitters than high income ones.
30 replies →
You are correct that most consumption taxes are intrinsically regressive, but you can turn pretty much any consumption tax into a progressive one by simply taking the money and redistributing it at a flat amount per person.
I believe this would be more fair to children who are the ones who will be most impacted by climate change in the end.
I believe there are even some governments that use this approach, but many of them don't make it feel as significant as it should. You should get a big fat cheque in the mail every month as if you won the lottery.
It's hard to see any of this as "trivially fixable." Taxes are inherently political, politics are complicated, changing incentives on this scale are pretty much impossible in our political system.
"Taxes are simple... and they don't have loopholes" is not at all how taxes work in the US. Perhaps your imagined perfect carbon tax is simple, but a simple tax with no loopholes is not likely to happen. Everyone wants a break or exception, and many of the interested parties are powerful.
2 replies →
^ In addition, I find it notable that the political party that is in favor of more regressive taxes is also against a carbon tax.
In an ideal world, I'd like the tax to be made more progressive, but I'll take anything!
I see the carbon tax as a 'stick' (to penalize undesired behaviour, in this case emitting carbon), but it needs to be coupled with a 'carrot' to encourage the desired behaviours.
I'd like to see a carbon tax coupled with massive investments to make public transit legitimately good. There are too many places where there is no viable alternative to driving, a carbon tax will unnecessarily punish those people without giving them a reasonable alternative.
1 reply →
Finally, some common sense!
I'll boil it down to:
It's the most efficient mechanism for internalizing external costs.
> since on average richer people will spend more on fuel
Why would you think so? People driving older cars, not being able to afford to fly - will certainly spend more money on fuel for their car.
15 replies →
We already have a carbon tax, you pay it when you buy the carbon. 3 cents per liter federally and an additional 18 cents per liter in California specifically.
2 replies →
> Make it revenue neutral and give every citizen a flat portion of the total collected revenue. Bam, it is now progressive,
Unfortunately, poor people don't have the cash on hand to hold them over until they get their Carbon Stipend on April 15th.
It's going to hurt poor people to charge them more at the counter, even if you give them more later. The stipend is just going to end up paying for less than the interest the tax created on a credit card.
> 1. Poorer people tend to drive older vehicles, so if you solely encourage higher fuel economies by taxing carbon emissions, then the tax is (at least short-term) regressive.
You give it back to poor as a income-phased out refundable tax credit. Crucially, base it not on how much they drive or consume, but on their income.
Name it something like the "Worker's Energy Credit". In the worst case, it cancels out the carbon tax spent by them commensurate with their lower income.
In the best case poor people who don't drive much actually come out ahead, and it's just a very progressive sales tax.
The rich might hate it, and call it "redistribution", which is fine because that's exactly what it is, and what taxes have always been, but this one would redistribute downwards instead of upwards, and incentivize lower carbon emissions by those who can afford it.
This is way too complicated. You just give it to everyone unconditionally and tax it as income. We already have progressive graduated income taxes with a huge exempt class, we don't need to layer anything on top of that.
Why don't the poor just buy smaller cars? Less weight - less pollution. Nobody needs a to drive a pickup, unless they run a farm or construction firm. A car weighing less than a ton would be perfectly enough for 99.9 % of drivers.
Giving it back based on being alive on Dec 31 seems the best solution to me. (It’s very difficult to game and if you give 900 billionaires under a million bucks in total, it’s just not that big a deal…)
2 replies →
> The rich might hate it, and call it "redistribution", which is fine because that's exactly what it is, and what taxes have always been, but this one would redistribute downwards instead of upwards, and incentivize lower carbon emissions by those who can afford it.
Larry Page would be pumped. His annual salary is $1.
I feel pretty strongly that adding exceptions and loopholes to taxes only benefit wealthy people, which is the opposite of the intent.
I would be interested in reading a study where all the tax laws in the country were burned down and rebuilt, with no loopholes or exceptions. Also, eliminate borrowing against a stock portfolio. That is downright evil.
4 replies →
Carbon taxes become progressive with the simple step of returning the revenue to taxpayers as a dividend payment using the existing social security payment infrastructure. Richer people have such outsized carbon footprints that most people would get back more in dividends than they lost in higher costs.
Meanwhile jet fuel for private jets is (and remains) not taxed at all, even in the EU.
This is a common trope, but is incorrect, at least for the US.
https://en.m.wikipedia.org/wiki/Fuel_taxes_in_the_United_Sta...
> Meanwhile jet fuel for private jets is (and remains) not taxed at all, even in the EU.
Not correct. Fuel for private aviation is taxed, including jet fuel and avgas. However, there are very few "private" jets, most are operated by some company, and therefore not private. Jet-A1 for a truely privately operated C172 with a diesel engine is taxed.
Which is bonkers. If ever there was a thing that should be taxed it's jet fuel for private jets. 300% tax on private jet fuel would be reasonable.
The emissions just to shuttle rich people from one side of the country to the next (For some, multiple times per day) is insane. You should need to be a billionaire just to afford flying private jets and it should still eat a significant portion of your income if that's what you choose to do.
And for what? Like, we live in the modern era, why does anyone need to travel from NY to Florida to Texas to California in a day?
12 replies →
What makes a jet private? Should Trump's Boegin 757 count as one? What if an airline is flying a jet with no passengers? Cargo jets?
2 replies →
Ffs
Looks like as long as only positive change is allowed to touch the poor, there will be little change.
Going to let us burn because not doing so would be regressive.
TIL poor people can't pollute, so their market segment shouldn't be incentivized to cut pollution.
TIL that US car companies won't make smaller cars in the face of different regulations, even though they made larger cars in response to current regulations.
The only way to avoid perversions is to tax the problem directly. The market will adjust to all proxies in unintended and harmful ways.
A disincentive on a thing you don't want makes people choose another thing that you may or may not want.
The only way to avoid perversions is to incentivize the things you want.
Taxing cigarettes led to vaping. Maybe less bad but still a nuisance.
If you want to reduce carbon emissions, if the tax is regressive or not does not matter as long as you tax emissions. If you want to mix too many things, you will not get a good solution for any.
Are you saying used car sales would have a carbon tax? I've never heard anyone suggest anything like that. It's just a tax on new items.
> 1. Poorer people tend to drive older vehicles, so if you solely encourage higher fuel economies by taxing carbon emissions, then the tax is (at least short-term) regressive.
The idea that policy makers care about this in any meaningful sense is absurd given the EV mandates, as EV's radically change the lifecycle costs of cars in a way that is absolutely destructive to people who aren't wealthy.
EV's lower the 'fueling' cost but shift part of it into large cashflow crushing battery replacement costs.
Automobiles have been a significant engine in elevating less wealthy americans because you can buy a old junky car for very little and keep it limping along with use-proportional fuel costs and minor maintenance. Even if it's an inefficient car, you use it to go to work, so you're making money to pay for the fuel. Less work, less work fuel required.
EV's significantly break the model and will push many more less wealthy people onto predatory financing which they'll never escape. Yet policy makers refuse to even discuss the life-cycle cashflow difference of EVs, and continue to more forward with policies to eventually mandate their use.
> it was almost certain to be wrong in one direction or the other, but it hasn't been updated.
It's been broken all along. We've had decades to fix it.
This.
Yeah that’s the truth. The mass of poor people are the predominant polluters. They produce little of value and pollute a lot. So the question then is whether you care about the environment or about the poor and most people would rather the latter.
I think the best way is to tax fuel itself. This way worse mpg result in more tax.
Tax diesel more than gasoline, LNG less.
This is already done, in Europe most of the fuel costs are taxes.
Thereby penalising existing vehicle owners who can’t switch to a more efficient vehicle overnight.
We have to come up with a rigorous alternative that doesn’t disproportionately affect lower income folk, because people tend not to be overly concerned about nebulous concepts like the climate impacts on unborn future generations, especially when my carbon impact at the margin is negligible when taken in context of global population.
If it is an issue - then option is to have less driving. Take a bus once in a while. Or bike.
Or switch to another old vehicle. Take old Golf instead of RAM, etc.
That makes sense, but there would be no incentive to switch to an engine that emits less carbon for the same fuel consumption (if such a thing exists)
You don't create carbon out of thin air, it's from the fuel, so burning the same quantity of fuel will result in the same quantity of carbon, no matter how the engine works. Therefore a tax on fuel is a tax on carbon.
6 replies →
By definition, more carbon is less efficiency. Efficiency is about how much of the hydrocarbon you turn into heat. Diesels often burn a little dirty. That's partly because diesel engines don't burn all the fuel
We already do in the US (but the money mostly goes to road maintenance)
Apparently not enough, as USA has quite cheap fuel. Add 100% carbon tax and people will start to pay attention to MPG ratings. With x2 price increase gasoline in USA is still cheaper than in Germany.
Isn't that what a carbon tax is? Adding a tax to the fossil fuel based on carbon content.
The purpose of the CAFE regulations is very explicitly to favor American automakers who make big trucks.
It wasn't the intended purpose. It turned out that way because the Detroit lobbyists were smarter and more motivated than the government policy people, and they bamboozled them.
The congress critters knew what they were doing and didn't do it for free.
That was one of several purposes.
This has been a known problem and could be changed if the political will to make common sense policy changes and corrections when needed was anywhere near existing. Unfortunately, we live in a [political] dystopia
> a simple carbon tax would be miles better than the complex morass of regulations we currently have
Doesn't this just punt the morass into the magic variable of one's carbon footprint?
How about this: fleet efficiency standards are stupid, anachronistic and counterproductive. Scrap them. Then, separarately, create a consumer-side rebate based on a vehicle's mileage. (Because a gas tax breaks American brains.)
> How about this: fleet efficiency standards are stupid, anachronistic and counterproductive. Scrap them. Then, separarately, create a consumer-side rebate based on a vehicle's mileage. (Because a gas tax breaks American brains.)
It's a good concept that is also ripe for abuse with anyone who has some amount of "fuck your rules" money. Same reason why fines that don't scale with income/earnings in some form often do nothing to deter "the rich".
I certainly like carrots more than sticks, but we need a couple of sticks as well.
Scaling fines with income only works to hard stop behavior, at which point just make it illegal. Most fines are proportional to damages.
Criminalizing fossil fuels is insane. The fines should cover the externalities.
1 reply →
why can't we just tax the gas at the pump? this is, at least, what I'm used to in Europe.
We do. But it’s a super regressive tax. Lots of very poor people depend on a bad MPG car to get to work and live.
If you subsidize polluting life-styles, you'll get pollution.
You think the rich suffer from pollution and car dependency? It's not at all clear that taxing gas will lead to worse outcomes for the poor. It's entirely clear that subsidizing pollution from the poor will lead to worse outcomes for the planet.
1 reply →
that's a different problem. US cities used to have good publhc transport, but the urvanization policies since 50s is car-centric. plus, because of the American cars having huge engines they have bad MPG. The current situation US is in is nothing to do with the tax regime.
I don’t think it would be possible to produce a carbon tax that’s simple
Tax the fuel. Gasoline now has a $X/gallon tax, as does propane, as does coal, whatever.
What is the difficulty with that?
Not clear what is meant here. Does ethanol from corn count? Methane from waste dumps? Gray hydrogen? Wood pellets? Ammonia?
Electricity from unclear source?
Human ingenuity is infinite. It is not enough to enact simple rules, people will just produce electricity with hydrogen and claim it green if it will make them profit. If it will help them evade carbon tax. Nevermind that hydrogen came from some extremely polluting process involving damaging our planet atmosphere and everyone's health.
1 reply →
It’s extremely regressive. You’d need to also give a rebate based on income level.
4 replies →
If interested in a case study, have a look at Canada's experiment with it.
Fuel is already taxed. What would a "carbon tax" add here?