Frank Bernheisel: The View From Here
Frank Bernheisel
Frank Bernheisel
Posted 02.12.17
Just Outside Washington


Carbon Tax Redux

James A. Baker III, Secretary of State and White House Chief of Staff under President George H. W. Bush, has advocated a good idea: a Carbon Tax (See Link). He is supported by Hank Paulson, Treasury Secretary for former President George W. Bush; Greg Mankiw, who chaired Bush's Council of Economic Advisers; and Marty Feldstein, Chairman of President Ronald Reagan's Council of Economic Advisors. Also in support are former Walmart chairman, Rob Walton; Thomas Stephenson, a partner at the venture capital firm Sequoia Capital; and Ted Halstead, founder of New America and the Climate Leadership Council.

Impressive indeed!

Their carbon tax, which would significantly reduce pollution and its environmental impacts, is based upon four concepts:

    1. A GRADUALLY INCREASING CARBON TAX ~ it would start at $40 per ton of carbon emitted to the atmosphere, which would compute to about $0.36 per gallon of gas.

    2. CARBON DIVIDENDS FOR ALL AMERICAN ~ in keeping with the current Republican mantra, this would be ‘revenue neutral' by using the money collected to pay an annual rebate to every American with a valid Social Security number.

    3. BORDER CARBON ADJUSTMENT ~ if a product, say batteries, were made in Mexico in a plant powered by coal, the carbon emitted during manufacture would be calculated and a tax charged at the border, raising their price. Batteries made in the new Tesla, solar-powered factory in Nevada, would be more competitive.

    4. SIGNIFICANT REGULATORY ROLLBACK ~ with an adjustable carbon tax, a national goal for carbon emission reduction, such as that from the Paris climate accord, could be measured and met. The carbon tax could be adjusted to insure the goal was met.

Not good enough says the conservative group Heritage Action, which attacked the plan Wednesday as "just the latest example of policy solutions crafted by and made for cultural elites." And "There is no room in the Republican Party for a carbon tax. These so-called Party elders might want to meet with former Secretary Clinton to discuss this idea."

Paul Ryan, "the Man of Ideas" thinks that a revenue neutral carbon tax is another "tax-and-spend" idea and "the wrong way to go." He is confusing the mechanism for achieving emissions reductions - a carbon tax - with how policymakers would use the potential revenues that the policy could raise. Those are two separate policy issues. Ryan's view is not surprising, given he learned his economics by reading Ayn Rand's Atlas Shrugged.

At a Washington gathering honoring Ayn Rand, Ryan invoked the central theme of Rand's writings when he told his audience that, Almost every fight we are involved in here on Capitol Hill … is a fight that usually comes down to one conflict - individualism versus collectivism.

We have heard that before in slightly different form:The Makers vs the Takers.