--- John Foster <[log in to unmask]> wrote:
> Steve Verdon, the Carbon tax envisioned by the World Resources Council
> is
> revenue neutral. Check their web site out....
>
> The document is called "The Right Climate for Carbon Taxes: Creating
> Economic Incentives to Protect the Atmosphere", by Roger Dower, and Mary
> Beth Zimmerman, World Resources Institute, Aug. 1992.
>
> This is a seminal paper. The introduction points to three salient
> features:
>
> 1.      "some of the revenues from a carbon tax can also be used to
> compensate groups adversely affected by the tax."

And this is where warning alarm number one should be going off.  If you
take the money raised by such taxes and spend it you run the risk of
creating a perverse incentive where you never actually decrease the
activity, emission, whatever you are taxing.  Why, because now you have a
group that relies on these taxes and wont be happy to see that revenue
disappear.


>
> 2.      "a portion of the revenues generated by a carbon tax can be
> returned
> to the economy by lowering other taxes, providing net gains for the US
> economy."

Rrrriiiightttt, when was the last time we saw taxes get decreased.  Oh
wait, I seem to remember, Reagan, but I am sure it was all an evil plot.



> 3.      "Carbon taxes offer a practical and administratively manageable
> means of encouraging a "least cost" approach to achieving any given
> level of
> reduction in carbon dioxide emissions. Compared to regulatory
> alternatives
> they could save significant economic resources."

Actually this is true and I think a tax is preferred, it is all this other
crud that is pawned off in an attempt to "sell" the tax.  If you agree to
this tax we will lower other taxes (wink, wink, nudge, nudge, "Say no
more.").



> To make the tax effective then it is recommended that the tax be pegged
> to
> the carbon content of the fuel. This would be effective in supporting
> fuels
> like natural gas, and effective in suppressing demand for new coal fired
> electricity plants. Coal has more than 2 times the carbon content that
> natural gas has.
>
> "Industries that emit C02 can use less coal and more natural gas, invest
> in
> energy efficiency programs, change their mix of products, or do all
> three."
>
> The tax could be used to encourage good practices such as investment in
> capital and labour, and discourage bad practices like transfers and
> releases
> of pollutants.
>
> "Carbon tax revenues can be used to shift the economic burden of our
> current
> tax to encourage "goods", such as investments in capital and labor, and
> to
> discourage "bads", such as air pollution, thereby promoting longer-term
> economic growth and a healthier economy."
>
> The effect of a taxation policy which discourages investment in capital
> and
> labour is considered a "dead weight loss" because of the "distortionary"
> impact of  taxes which impact on labour income. Reduce the taxes on
> labour
> income, and increase the taxes on the most polluting fuels like coal and
> oil, will improve the investment and capital flows into new
> technologies.
> This is what Sweden has done recently. They have implemented a carbon
> tax
> and reduced labour taxes. This ensures that the competitiveness of the
> economy is maintained and this supports a reduction in costs incurred by
> energy demanding industries which imports 100 % of their fossil fuels.
> Some
> industries simply begin to produce their own power like IBM and the Body
> Shop International.....from wind, etc.
>
> Because of the distortionary tax policy which taxes labour, but not
> carbon,
> there is "for every dollar raised in tax revenue, more than a dollar's
> worth
> of private production...lost."
>
> The estimated loss of economic efficiency from alterntive forms of
> taxation
> presented here is from "The Excess of  Burden of Taxation in the US" by
> Jorgenson and Kun-Young, HIER discussion paper No. 1528, Harvard
> University,
> Cambridge MA, November 1990.
>
> Jorgenson and Kun-Young estimate that for every additional dollar raised
> through capital income taxes, "the economy loses 92 percent in lost
> economic
> productivity....When the revenues generated by a pollution tax are used
> to
> reduce the marginal tax rate on capital, labour and other resources, the
> deadweight loss from these taxes is also reduced."
>
> The idea here is very cogent because if the worst return on an
> additional
> tax dollar raised are from taxes on capital, labor and other resources
> in
> terms of economic efficiency, then the shifting of taxation from capital
> and
> labour onto natural resources would improve efficiency. Currently the
> marginal tax rate on labour is in the order of 30 %, whereas on some
> natural
> resources the tax is zero. For instance their are no taxes on jet fuel,
> nor
> on coal. If the corporate income tax rate was reduced by 35 billion US
> dollars, and  the estimated increase in economic  efficiency would be in
> the
> order of 23 and 32 billion US dollars, resulting in a positive return if
> a
> revenue nuetral taxation policy was implemented to discourage carbon
> emissions. Now if the estimated loss in economic efficiency was
> calculated
> for a carbon tax of equal revenue, and that revenue was balanced by a
> reduction on corporate capital and labour, the benefit would be
> tremendous
> because there would be an incentive to reduce the inputs of carbon
> emitted
> from energy. Simply put, no one would care if less coal was used,
> because
> the whole economy would be better off....

John, you do realize what this is saying don't you?  That with their
carbon tax the economy would be more efficient, everybody would be better
off, i.e. there would be more goods and services available.  People could
consume more.



> "If for example, $35 billion in carbon revenue taxes were used to reduce
> corporate income taxes by the same amount, the economy would be better
> off
> by between $23 and $32 billion."  This is because of the economic
> efficiency
> of having people employed rather than on welfare and social assistance
> burning up tax dollars, and because industries would retain far more
> earnings - rather than attempt to hide profits in risky and unprofitable
> ventures. The incentive to find alternative and renewable energy would
> be
> one way industry would cut costs without impacting negatively the
> labour,
> and capital markets. This kind of taxation would stimulate economic
> growth
> in comparison to high corporate taxes and labour taxes.


=====
"In a nutshell, he [Steve] is 100% unadulterated evil. I do not believe in a 'Satan', but this man is as close to 'the real McCoy' as they come."
--Jamey Lee West

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