tag:blogger.com,1999:blog-582368152716771238.post8809319642803526450..comments2024-03-28T14:41:03.793-05:00Comments on The Grumpy Economist: Economists' letter on carbonJohn H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger41125tag:blogger.com,1999:blog-582368152716771238.post-41495652437170392352022-06-23T11:38:14.413-05:002022-06-23T11:38:14.413-05:00This comment has been removed by a blog administrator.dfysaashttps://www.blogger.com/profile/06945218300640712720noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-57114169596186305882019-03-13T16:59:55.427-05:002019-03-13T16:59:55.427-05:00While the idea of a carbon tax with all of the pro...While the idea of a carbon tax with all of the proceeds returned to the citizenry is the best approach, does anyone think that the politicians would allow this to happen? Unless the legislation included specific language that stated if all of the funds weren't returned to the citizenry the legislation would be immediately self-cancelling. It doesn't take too much imagination to see AOC or Bernie Sanders wanting to subsidize someone or Marco Rubio wanting to fund daycare or whatever is his cause of the moment. I doubt if politicians would want to give up this revenue stream when the could raise more by saying that the climate change is getting worse and we need to use less carbon.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-16342585955517178392019-01-31T00:23:22.620-06:002019-01-31T00:23:22.620-06:00Pavel Shevchuk - The paradox is true and what is u...Pavel Shevchuk - The paradox is true and what is unsaid is that An Agency, with enforcement powers (the power to impose higher costs on 'polluters') would have no way to plan how to implement this (without tyranny). <br />To cite Hayek, it is a pretense of knowledge to believe "we" could design a system to run the world ecosystem from a control room; much less that trustworthy humans could be found, and fired if they turn out to be "bad cops."<br />"We" need to design a system of property rights, and incentives, to encourage desired behavior. This would be the "nudge" idea, of which I am not fully persuaded - because I just hate government in my guts, irrationally.<br />Joe Cobbhttps://www.blogger.com/profile/08291560283071288527noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-14777486831289863942019-01-31T00:00:41.264-06:002019-01-31T00:00:41.264-06:00The Brookings Institution item is at https://www.b...The Brookings Institution item is at https://www.brookings.edu/blog/up-front/2019/01/29/ocasio-cortez-wants-to-raise-the-tax-rate-on-high-earners-the-tax-cuts-and-jobs-act-already-did/?mod=djemCapitalJournalDaybreak<br />And, to correct my spelling, it was in "Capital Journal" rec'd 1/30/19 6am<br />Joe Cobbhttps://www.blogger.com/profile/08291560283071288527noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-46823880378975272232019-01-30T23:56:48.516-06:002019-01-30T23:56:48.516-06:00I saw a link in today's WSJ "Capitol"...I saw a link in today's WSJ "Capitol" newsletter (under other things they are reading) to an interesting Brookings Institution item which pointed out the much-cited 70% tax rates, which B.Sanders and the new socialist congressp'on from New York are advocating, ARE ALREADY CURRENT LAW. Does that surprise anyone? The Republicans did it in 2017, by applyhing the new 21% corporate rate to the top salaries also paid by those corporations. Look it up.<br />Congress does not like "rich people," even when the Big Business Party is in control.<br />Joe Cobbhttps://www.blogger.com/profile/08291560283071288527noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-59893839335596443342019-01-29T17:19:25.391-06:002019-01-29T17:19:25.391-06:00The United States is running a Federal deficit of ...The United States is running a Federal deficit of 4% of GDP. No one wants cuts to spending that would affect them personally, the "right" does not want cuts to military spending and no one want a tax increase they would bear. A carbon tax that raised net revenue for the Federal government would not be a bad route out of your current fiscal box. (The proposed confiscatory taxes on high incomes and/or wealth, whether fair or not, would simply not raise enough revenue.)Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-58290142757073246202019-01-25T07:35:13.746-06:002019-01-25T07:35:13.746-06:00Is the recent failed French gasoline tax an exampl...Is the recent failed French gasoline tax an example of how such a tax would be received? If I understand the proposal, the rebates would be critical for having the consumers buy in.Anonymoushttps://www.blogger.com/profile/05109686459827002945noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-26249851690077765512019-01-22T18:24:12.218-06:002019-01-22T18:24:12.218-06:00Wishful thinking, without question. "Revenue ...Wishful thinking, without question. "Revenue neutral" 'carbon tax' was introduced in 2008 in the Canadian province of British Columbia. It was implemented at the same time as a reduction in provincial income tax rates were implemented--the two measures were tied together. Fast forward to 2017, a socialist government takes power in British Columbia, and voila!, two new measures were introduced and passed by the legislature: (i) the 'revenue-neutral' feature of the 'carbon tax' was eliminated, and (ii) the income tax rates were increased. A mere nine years had passed by that point. Dr. Cochrane engages in wishful thinking in this article. Practical politicians are current period oriented; taxes are the one measure that they can control at will, and they are not reticient to alter tax policy to suit their needs. Lest we forget, the introduction of the income tax was intended to be a temporary measure with revenues devoted to the reduction of debt incurred to pay for war expenditures of WWI. The Arab has a proverb about a camel, a tent, and it goes like this... if you let the camel's nose into a tent, the whole camel will follow, almost surely. Beware economists promising manna. Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-76688801686798706242019-01-22T17:03:46.178-06:002019-01-22T17:03:46.178-06:00Oil companies would prefer you get rid of IDCs if ...Oil companies would prefer you get rid of IDCs if they can be eligible for the same capital deductions as other companies.<br /><br />Big companies like Exxon would prefer you get rid of IDCs because it hurts small producers, and hence benefits them. Small producers would object because it will raise their costs.<br /><br />No one will care if you get rid of MLPs. Like I said, literally every one is converting to a C-Corp.<br /><br />LIFO is a non-unique as discussed.<br /><br />Feel free to charge higher royalties for new federal land. Companies bid a lease bonus for those lands. As the royalty goes up the bonus goes down. Unclear what the optimal point is so industry really doesn't care.Anonymoushttps://www.blogger.com/profile/05835197635286625706noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-66152940222280975542019-01-21T20:59:35.443-06:002019-01-21T20:59:35.443-06:00Same old tired denials. And now the IMF is a green...Same old tired denials. And now the IMF is a green left institution.<br /><br />Since the impacts of the items listed above are negligible I guess the oil companies will have no problem if Congress takes them all away. Run that one up the flagpole and see what happens. Michael Gorbackhttps://www.blogger.com/profile/05789268342873061299noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-44000460787768616462019-01-21T16:57:07.098-06:002019-01-21T16:57:07.098-06:00"We are coasting down hill on the legacy ener..."We are coasting down hill on the legacy energy, cheap conventional oil, hydro, nuclear. New sources are more expensive in terms of both energy and capital."<br /><br />My guesstimate is that at $0.10 per kwh for energy (electricity, natural gas, gasoline, all other sources), life will carry on pretty much as it is. Take the price for energy to $1.00 per kilowatt hour and then life becomes radically different. Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-4781037920159782642019-01-21T14:57:34.824-06:002019-01-21T14:57:34.824-06:00A not insignificant problem of carbon tax is that ...A not insignificant problem of carbon tax is that should a technology that is capable of cutting down the emissions be created, it may (because of Jevons' paradox) push emissions higher. As such you will have to have a pretty nontrivial procedure for adjusting such taxes (and I cannot readily propose such procedure)Pavel Shevchukhttps://www.blogger.com/profile/05577218879648798556noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-3296771866746029002019-01-21T11:03:36.538-06:002019-01-21T11:03:36.538-06:00If you were back in Rome the surplus energy was fr...If you were back in Rome the surplus energy was from wheat. So that was what you taxed. You tried to find a sweet spot, enough to finance the army etc, but not enough to drive the peasants off the soil and into the city.<br /><br />Now the surplus energy responsible for everything we see around us is fossil fuel and more specifically diesel. So tax it directly, hopefully eliminating some of the current Rube Goldberg system. <br /><br />A problem may be the amount of surplus energy in the new marginal oil barrel. Is there enough surplus to run a complex society? We are coasting down hill on the legacy energy, cheap conventional oil, hydro, nuclear. New sources are more expensive in terms of both energy and capital. Shale oil is still on average losing money and not paying much in taxes. <br /><br />So the effect of carbon taxes may be magnified by effects on the lower energy return resources, now the majority of production. It is similar to taxing the marginal Roman wheat farmer who is tilling a less productive hillside. The energy system may be more fragile than it first appears.Jim and Linda Kelleyhttps://www.blogger.com/profile/16837860762554929164noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-24449009049671626612019-01-21T10:58:33.431-06:002019-01-21T10:58:33.431-06:00"Of course, in the 5th week of a shutdown, ov...<i>"Of course, in the 5th week of a shutdown, over a completely symbolic issue, with great deals on the table that benefit both sides, if only each could let the other have a symbolic victory, is not a great time to advance such hope."</i> -JC<br /><br />The problem is that symbols do matter. For expectations about the fairness and enforceability of future contracts.<br /><br />Going forward, the economic potential of Latin America is enormous and, if managed properly, could help significantly enrich Americans. It is not in the long-term collective interests of Americans to build this albeit symbolic wall, precisely because it would signal/confirm that Americans are racists, thugs and bullies, and capitalism is nothing more than a zero-sum game.<br /><br />The truth is more nuanced. US policy elites believe in well-defined secure economic property rights as long as the USA can make significant exceptions based on ethnicity, race or sectarian criteria. That attitude will not help US-based multinationals in Latin America (many of whom who are staffed by people who are far better informed, competent and forward looking than most US voters).<br /><br />Please take careful note that the current US regime is playing to all the stereotypes about modern freemarket capitalism that radical left-wing militants and their national liberation guerrilla movements have preached for decades.<br /><br /> America's lax immigration policies/hunger for cheap labour have no doubt caused problems. Neo-Malthusian crisis in Central America has indeed the potential to dump millions of low socio-economic status <i>security refugees</i> into the USA but Trump's wall, strewn with racism and gratuitous insults, is not the solution. Erik Poolehttps://www.blogger.com/profile/02442592238782846163noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-41456705071200750462019-01-21T03:22:04.959-06:002019-01-21T03:22:04.959-06:00In theory, one could also use the tax to neutraliz...In theory, one could also use the tax to neutralize emissions. For example, a ton of wood chips currently costs about 40$ on the free market. I would guess that a ton of wood binds about a ton of carbon dioxide. So, the 40$ could also be used to buy wood and deposit it an old mine, where it won't decompose due to a lack of oxygen, locking up the carbon for many centuries.Luzius Meisserhttps://www.blogger.com/profile/06987859804935271173noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-4716081689488995062019-01-20T21:47:05.608-06:002019-01-20T21:47:05.608-06:00Apparently my spell check thinks tham is a word in...Apparently my spell check thinks tham is a word in the English language.<br /><br />Post in haste, repent at leisure.Fat Manhttps://www.blogger.com/profile/09554029467445000453noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-17640188777442181142019-01-20T21:32:23.019-06:002019-01-20T21:32:23.019-06:00I am pleased you discussed this thoughtfully, and ...I am pleased you discussed this thoughtfully, and Tyler Cowen's issue are worth looking at. I am mostly concerned a carbon tax would not cause the other tax cuts and deregulation. Instead it would add on more regulations, as tax enforcement and the border tax adjustment idea is rediculous, as an unmeasurable basis for any tax (guesswork at best; crony discrimination at worst).Joe Cobbhttps://www.blogger.com/profile/08291560283071288527noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-60444902619276526892019-01-20T21:28:35.704-06:002019-01-20T21:28:35.704-06:00Andrew Friedman -- Indeed, when the USA has been r...Andrew Friedman -- Indeed, when the USA has been reduced to the level of 1875 again, with a population 8 times larger, it might be easy for a technoligically advanced China or India to arrive and set up a new government.<br />Europe, of course, would be in the 18th centry again.Joe Cobbhttps://www.blogger.com/profile/08291560283071288527noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-84552404975467068092019-01-20T21:23:33.388-06:002019-01-20T21:23:33.388-06:00Anonymous -- "Impede ... progress" is to...Anonymous -- "Impede ... progress" is to snear at political opposition that has its own arguments, however much you might think they are unworthy. I believe in "climate change" but I do not believe human activity "is causing it." Why do you? Because one of your "thought leaders" has told you so?<br />My own scepticism of the "human cause" based on forecasting models comes from my experience with the accuracy of macro forecasts, and the compounding of computing errors.<br />I have grown more sceptical about economic forecasting over the years.<br />Joe Cobbhttps://www.blogger.com/profile/08291560283071288527noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-78296820895734277082019-01-20T21:16:38.042-06:002019-01-20T21:16:38.042-06:00Fat Man (me too) -- Repealing the 16th Amendment i...Fat Man (me too) -- Repealing the 16th Amendment is a worthy goal, but as Alice Rivlin pointed out some years ago, it would not bar a EU-style credit invoice VAT, if enacted in unison by all the States. (They could use their own rate structures, as in Europe.)<br />This could work when the 16th Amendment is repealed, because Article 1, Section 3, would kick back into force (the 60% persons clause is irrelevant). Each State would be apportioned, per capita, its fair share of the Federal budget to remit to the US Treasury.<br />That would be a good fillip for tax-victim people to move out of high-tax States and into those with a lower VAT.Joe Cobbhttps://www.blogger.com/profile/08291560283071288527noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-51030333612576890912019-01-20T21:07:52.066-06:002019-01-20T21:07:52.066-06:00Patrick Sedgley -- Right on! Don't also rule ...Patrick Sedgley -- Right on! Don't also rule out the domestic enforcement issues. If any economist wants to reduce the "wedge" that adds to inefficiency, enforcemtnt and collection costs can be very high. <br />For years, I have prepared US personal income taxes and enforcement is becoming more vicious by the years. I can only applaud the Congressional cuts in IRA appropriations, lowering auditing activity. God save the free worker/contractor who is invisible to the system. <br />Imagine all the jobs such a carbon tax will provide for Dept. Energy (?) auditors.<br />The government employees' unions will support this overwhelmingly (unless their Green socialism already has sold their souls to the cronies).<br />Joe Cobbhttps://www.blogger.com/profile/08291560283071288527noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-39271285598325800482019-01-20T20:59:02.226-06:002019-01-20T20:59:02.226-06:00Comment to J.McLean -- Good exposition to the &quo...Comment to J.McLean -- Good exposition to the "oil company subsity" claim the Green Left invented decades ago. Depreciation/depletion and other costs are due to all taxpayers in a Net Income system.<br />Joe Cobbhttps://www.blogger.com/profile/08291560283071288527noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-66149489979007883532019-01-20T18:49:06.316-06:002019-01-20T18:49:06.316-06:00I love the pollution taxes. Is there a constitutio...I love the pollution taxes. Is there a constitutional right to pollute the air that other people breathe. Lead, that used to be in gasoline, is in everybody's soil now. <br /><br /> Add on property taxes, sales taxes, Pigou taxes and tariffs and you have a much better tax system than one that relies on unenforceable and horribly complicated income and payroll taxes.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-8241263742115407782019-01-20T18:35:22.264-06:002019-01-20T18:35:22.264-06:00Insightful post. Settled my stomach after Jenkins&...Insightful post. Settled my stomach after Jenkins's column left me conflicted at the breakfast table.<br /><br />To the pessimistic commenters:<br /><br />If you're a empirical, pax-americana, rule-of-law, conservative libertarian, but this climate bargain still makes you feel queasy, judge not only its merits but also the alternatives. Read the left's "Green New Deal." It slashes the military in half, eliminates 87% of U.S. energy production, and bans "non-essential" cars. A lefty environmentalist writes at The Guardian "take railways and utilities and energy grids back into public control; regulate corporations to phase out fossil fuels; and raise taxes to pay for massive investment in climate-ready infrastructure and renewable energy — so that solar panels can go on everyone’s rooftop, not just on those who can afford it." This plan invites cronyism and inefficiency.<br /><br />A climate bargain, while imperfect, trades a mediocre tax (price on carbon) for elimination of regulations and subsidies. The statists hate this exchange. We might paraphrase Churchill, and judge the emissions trade by the enemies it has made.Andrew Friedmanhttps://www.blogger.com/profile/03367947221786101429noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-79398375212400531652019-01-20T16:46:34.851-06:002019-01-20T16:46:34.851-06:00One gallon of gasoline turns into about 20 lbs of ...One gallon of gasoline turns into about 20 lbs of CO2 (ignoring CO2 released in the extraction, refining and distribution). A $40.00 per ton carbon tax is only $0.40 per gallon - and that will not be enough to make a big change in consumer habits. To make real changes the tax would probably have to rise to the $100 to $300 per ton range. Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.com