Tag: taxation is not ok

New Studies Find Few Costs, Many Benefits to Carbon Tax

By Max Bibeau | United States

In the aftermath of an outpouring of scientific research in recent years warning against the negative environmental impacts of carbon dioxide on the environment, legislators and institutions alike have proposed countless ways to reduce emissions. While many exist, one is a clear frontrunner for many: the carbon tax.

The idea is simple – tax the emissions of carbon at a set rate per ton. Theoretically, this monetary incentive should cause companies and individuals to avoid causing high levels of emissions. They could either streamline and modernize factories or by driving more fuel-efficient cars. However, many criticize the economic impacts of such a plan. The libertarian Cato Institute, for example, believes it would discourage economic growth.

The Carbon Tax Studies

In July of this year, a series of new studies came out that should suppress such concerns. The studies make up the Carbon Tax Research Initiative, which began in early 2018. The initiative is spearheaded by four different, independent think tanks (The Center on Global Energy Policy at Columbia University, The Rhodium Group, The Urban-Brookings Tax Policy Center, and The Baker Institute for Public Policy at Rice University). All of these groups are nationally renowned for their nonpartisan research and analysis.

The studies, made public on July 17th, came to similar conclusions – a carbon tax would have negligible negative economic costs, yet a plethora of positive environmental and economic benefits.

The studies analyzed three levels of taxation in order to analyze all possible policy options. The studies all simulated a low level of $14/ton, a medium level of $50/ton, and a high level of $73/ton.

Increased Revenue

The first area to examine is government revenue that the tax itself will generate. On the low level of taxation ($14/ton), government revenue was not outstanding, but was far from meager, raising an estimated $650 – $750 billion over a 10 year period. The high level of taxation ($73/ton), however, could raise enough revenue to completely change the US budget, raising between $1.5 – $3 trillion over a 10 year period. This government revenue could be critical to solving the ever-growing budget problem in the United States, providing a new and reliable stream of revenue when the state most desperately needs it.

Lowered Carbon Emission

When it comes to reducing emissions, the carbon tax also performed extremely well, lowering them across the charts. The low level of taxation reduced emissions by around 27% by 2030, coming close to, but not quite reaching the goals set by the Paris Climate Accord (28% reduction in emissions). The medium level surprisingly performed the best of all three levels, decreasing emissions by up to 46% by 2030, reaching and surpassing the Paris Accord’s goal. The high level of taxation reached a plateau in the late 2020s, reducing emissions by a still impressive 41%.

Economic Impact

As for economic criticisms, the series of studies found that most, if not all claims about a hurting economy would not occur. Almost all emissions reduction (over 80%) would take place in the power sector of the economy. The tax would have an extremely minimal impact on gas prices, increasing the price of gas by around 1¢ /gallon, per dollar added to the tax. This impact would be only temporary, however, and would actually serve as a beneficial incentive to push individuals towards electric cars.

The only market severely affected is the coal market, which would fall between 28% and 84%, depending on the rate of taxation. However, this makes sense, as there are many alternatives to coal that are already in use today. The tax would simply expedite their use. Other industries, such as oil and natural gas, would not see much of a dip at all, especially as petroleum will likely still be the primary fuel for transportation in 2030.

In stark contrast to the claims of an economic downturn, some of the studies even found potential economic benefit from the carbon tax. In the early years of the tax, GDP growth would likely stagger. However, later on, GDP is expected to increase up to 0.5% as the new revenue from the carbon tax is able to lower other taxes, such as the corporate income tax, and reduce the national deficit.

A Beneficial Policy in Nearly Every Way

While definitive research surrounding the impacts of a carbon tax on the United States were previously in short supply, the information that the groups provide paints a clear picture of the US under the policy. Government revenue could see a critical new source, bringing in up to $3 trillion in only 10 years under the tax. Also, depending on the rate of taxation, emissions could be reduced by up to 46%, far surpassing the goals of the Paris Climate Accord. Finally, the economic impacts of the carbon tax could be, contrary to popular belief, extremely beneficial, raising the GDP of the US in the long run.

Read the full studies here:

General Page

The Rhodium Group

The Urban-Brookings Tax Policy Center

The Baker Institute for Public Policy

The Center on Global Energy Policy


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Benefitting From Taxation Does Not Make it O.K.

By Andrew Lepore | USA

Pretty much all libertarians are familiar with the fact that taxation is theft, as well as the moral arguments surrounding that fact. After all, the definition of theft from The American encyclopedia of law states “(theft is) the generic term for all crimes in which a person intentionally and fraudulently takes personal property of another without permission or consent and with the intent to convert it to the taker’s use”. This objective fact is clear, and proponents of taxation don’t dare to question the legal definition of theft, but they do have some tricks up their sleeves to try to finagle justification for their beloved government subsidized programs.

The first of their ideas being the idea that every person in society, by simply existing, has signed a magical, non-existent social contract legally binding them to obey all measures of the state to every possible extent. With a basic knowledge of what a contract is, this concept is easily debunked. Once it becomes apparent that the statists have no principled legal argument to justify taxation, they will most likely resort to claiming involuntary taxation is a justified transaction due to the fact that the taxpayer will “benefit” from tax-subsidized programs. In other words, they’re saying that it is completely morally justified to take your money at gunpoint with the threat of jail time because you may in some way benefit. This justification is laughable for many reasons.

The popular opinion about taxation is much closer to a fairy tale than objective truth. It’s that everybody pays in their fair share and everybody receives their fair share (relative to income in many cases). The popular opinion is that we are better off with taxation than without it. The fact that the state has not given you a choice in the matter renders the question of if we really do benefit irrelevant. This justification so often used by statists is not only morally absurd but flies in the face of economic reality. What classifies a legal transaction is a consensual agreement between a buyer and a seller to exchange goods or services, both parties will only rationally enter into such an agreement if they perceive themselves to be better off after making the trade than before it. The basic economic principle of cost-benefit analysis shows us that rational people will only act if the benefit of that action outweighs the cost of that action.

In other words, the only reason a rational person would make a purchase is if the benefit they receive from the purchase is of more value than the cost of the purchase. For example, you have 5$ and an empty stomach. You go to McDonald’s. to buy a burger with your 5$. The only reason you would make that purchase is that you have determined that having a full stomach is of more value to you than that 5$ at that time. This may seem like common sense, but obviously not to everyone. This simple economic thought experiment debunks the morality of involuntarily taking from taxpayers. But more-so it proves that taxation is, in fact, a scam. If taxation wasn’t a scam, if society really does benefit more than they lose from taxation, there would be no need for it to be compulsory. If the benefit of government programs really outweigh the cost which taxpayers pay in, not only would it not need to be compulsory, people would want to pay into the system as it would benefit them more than not paying in.

To use a crude reductio ad absurdum in order to demonstrate the irrationality of this idea when looked at logically, consider this. You run a local business and you’re doing pretty well for yourself. One day you are doing your normal business when Jimmy and the greaser gang show up. Jimmy makes you an offer, “every Saturday I’m going to come and collect 50% of your weekly profits, but in exchange, we’re gonna offer you protection from those pesky oriental gang bangers down the street.” After thinking about it, you know you can hire professional security who will actually be adherent and liable for a fraction of the cost which Jimmy put forth, so you immediately reject his deal. Jimmy laughs. “This isn’t optional. You live in my territory, don’t you? You must adhere to my social contract. Have my money every week your we’re gonna break your kneecaps and throw you to rot in a cage”. Now by statist logic, this extortion is completely justified as you receive a benefit from it.

To them It doesn’t matter that the value of the benefit you received was far less than the value of the money that was extorted; all that matters is you get some form of abstract, immaterial benefit out of somebody violently extorting you. Statists would tell you that you should be grateful for the greaser gang for providing you with protection, they would say if you don’t like it why don’t you move to some other gangs territory.

When it gets down to it, that is all that government is: a gang.