Ex-Secretary of Labor, State, and Treasury George Schultz and Economics Professor Gary Becker say we should have one. They even insist that it be revenue neutral.
The problem is, though, that they’re arguing from two false premises, and it’s unfortunate that two such well-educated men should be so caught up in drama rather than fact.
The first false premise is that any tax change (as the imposition of a carbon tax would be) must be revenue neutral. This may, in fact, be needful for the politics surrounding imposing a new tax (or cutting old ones), but there’s no rational reason for revenue neutrality. The economic necessity, given our exploding deficit (though President Barack Obama says his budget shrinks it, and, sure, he is an honorable man) and our even more explosive national debt, demands a reduction in spending with its associated reduction in borrowing. Taxes need not be increased under any nearby circumstances, nor need the imposition of a new tax be “paid for” with an equal increase in spending or reduction in tax somewhere else. With spending coming down to eliminate our deficit and further, taxes overall can be cut, too.
The second false premise is that carbon, or carbon dioxide, is a pollutant, the blatherings of the political bureaucrats at the EPA notwithstanding. The climate facts here are that CO2—the primary product of, say, Schultz’ and Becker’s energy companies—is a lagging, a confirmatory, indicator. The climate record demonstrates that CO2 increases in Earth’s atmosphere lags climate warming on a global scale by some hundreds of years. Since CO2 “emissions” are primarily from plant and animal respiration—even adding in the output of those energy plants—that lag following planetary warming comes from increased plant and animal life on the warmer planet. It’s a confirmation of the increasing health of the planet. That’s not much of a pollutant.
We don’t need a carbon tax, though. Come to that, we don’t need any tax at the levels at which they’re charged today.