Want to cut the deficit? Try a carbon tax.

Money is money and I have no problem with suing. It's not either or. A higher tax on gas for instance means less use and less pollution and less cost to clean it up. Am I suppose to sue the customers for buying gas? Try to make sense.

 

Try to apply a little common sense. New and/or higher taxes do nothing more than perpetuate increased government deficit spending.

While raising tax on gas would likely initially result in a reduction of its' use by those who can least afford to pay the higher price and perhaps even some who could still afford the cost, it also produces many consequences directly related which result in cost increases on most everything else relative to supporting a growing population. Food prices, goods and services and everything else which is needed or wanted and depends on transport in its production and bringing it to market also increases. Those who depend on government assistance then require greater monetary assistance, while those working demand higher wages to offset the higher cost of living while trying to maintain their lifestyle, and only the wealthiest are able to maintain their lifestyle as previous although their excesses of wealth may have diminished relatively.

When we allow government to live beyond its' means, the consequences are greatest for those who have the least means. Currently the Federal government spends more than $1.30 per hour for each and every member of our population regardless of age. That's nearly $1,000 per month for each member of our population.

In most every case I see, it appears tax increases or new taxes are seen acceptable because they are presented as being applied to the rich, who can afford them, while ignoring the fact that in the end the costs are simply passed on to the population as a whole, creating greatest suffering for those who can least afford it.

Do we need a carbon tax? In my opinion, NO. Do we need laws and regulations relative to pollution? Of course, but try to exercise some common sense and rational thinking as to just how far we want to go with such laws and regulations, as most every action has consequences, and often the consequences, in the long term, can be more costly than the problems the actions were thought to helpful in reducing or eliminating.

 

Common sense informs us that there is no Coase Theorem solution (i.e. its not a matter of just protecting property rights through the legal framework) and that a tax is the only means to eliminate the welfare losses associated with pollution. You'd need to go for a non-common sense stance to justify the 'no carbon tax' result

 

Would you like to prove that? Bush cut taxes and we went from surplus to huge deficits and we didn't get the jobs he promised. Obama caught the backwash of those tax lowering policies. When you cut or increase government spending it should be a carefully considered process and taxes should be consistent with paying the costs. Screaming ideological slogans and going after programs with a meat ax is not good policy. We just lost 24 billion dollars due to a meat ax government shut down thanks to the party that hates deficits. The carbon tax is a good tax because it raises needed revenue and suppresses environmentally destructive energy(Fossil fuel) and encourages better energy sources like solar. Think of it like a cigarette tax. And it doesn't encourage the growth of government like your regulatory approach. You simply pay more at the pump and get the same good effect as regulation.

 

Did you miss where I included laws and regulations which generally cover the primary source of polluters? If you neighbor dumps some waste on your property, you may have to resort to just making use of the legal framework as an individual.

I maintain we do not need a carbon tax, or any new or increased taxes for that matter, but do admit the budget deficit needs to be reduced with intent to eliminate it entirely, except in time of great need, and then only temporarily.

 

What do you think the Coase Theorem refers to? The use of laws to protect property rights, then ensuring that bargaining solves the negative externality. Of course the problem is that the bargaining costs involved are too high. The theorem is essentially informing us that "common sense" leads to the tax solution. As I said, your opinion isn't consistent with the reality of the problem

 

Curiously the so called surplus you refer to resulted in the debt increasing, and as I stated, tax increases CAN and DO often result in a temporary deficit reduction, giving the appearance of having been a good decision.

As for an increased gas tax reducing the consumption by those who cannot afford it, it also raises the cost of providing their needs, and how and where is the increased tax revenue to be spent? Obviously I remain unconvinced that CO2 is a harmful pollutant.

 

Reiver,

So it is your opinion that the Coase theorem produces a 'tax solution' as a common sense solution?

Wouldn't it be nice if all problems could be resolved with such simplicity?

Personally, as I don't see CO2 as being a major problem, I am more interested in attending to the goverments deficit spending as a major problem needing a solution.

 

Opinion? Nothing to do with opinion. Mere understanding of the Coase Theorem and its 'common sense' appreciation of transaction costs and the failure of protecting property rights.

You're full of opinion

 

Obviously you seem to feel the Coase theorem supports your opinion, therefore you feel it adequate to simply employ its' name as 'proof' in support of your opinion.

Aren't we all?

 

Nope. I merely understand what the Coase Theorem says. That the market won't find a solution (with government protection of property rights) is just a matter of fact. Happy for you to try and suggest otherwise. Good luck!

 

James Hansen has a proposal that we should add a one dollar per gallon tax and kick it back equally to every citizen thereby mitigating the harmful economic effects and even rewarding those who use less gas. Alaska has a version of that and they have the lowest spread in any state of high to low income earners.

You're argument isn't with me it's with science. You've moved into the Lysenko zone. Check that name out on google.

 

Nope? It DOESN'T support your opinion?

You seem to have found something in it that does support your agenda though.

Why should I suggest anything otherwise, I simply disagree. Thanks, but I rather employ good choices than hope for luck to produce desirable results.

 

I have no argument with science. I think we would benefit more by reducing dangerous toxic waste.

The thread title "Want to cut the deficit? Try a carbon tax." seems to imply that the deficit is directly related to carbon, CO2, The deficit is a result of excessive spending, which exceeds the available means, ANY tax increase could reduce the deficit temporarily, and if government was to tax 100% with no deductions at all, redistributing only what it collected, we would have no deficit at all. Of course I am not recommending it to do that, and would prefer instead it to cut spending and reduce taxes.

 

Again, the whole point of the Coase Theorem is to demonstrate the importance of transaction costs. Its those costs, rather than the distinction between private and social costs, which ensures market failure.

We both know that you can't suggest otherwise. This accounts for your refusal to meet my little request.

 

But a tax increase on fossil fuel would increase revenue AND reduce the cost of mitigation of environmental damage. That's a total plus.

 

Are you in school? It appears that you are attempting to prod me into criticising the Coase theorem, as it has been presented to you. IF, as you seem to be implying, the Coase theorem is factual and without flaws in its' application present an example which could be applied to ALL other similar examples and produce the same results each time leading to market failure. Coase himself was critical of the theorem. Can you provide a mathematical formula representation of the theorem containing ALL the variables having effect on the outcome which can repeatedly produce the results that you infer the theorem proves?

Perhaps you might at least agree, relative to the question asked by the title of this thread "Want to cut the deficit?" that a deficit occurs when more is being spent than one has to spend?

 

It MIGHT increase the revenue if the tax increase was enough to make up for the loss of revenue resulting from the decrease in use that it is intended to produce. But then the costs of bringing things to market would also increase, which admittedly would also produce more tax revenue, not to mention the additional consequence of greater government spending as the rising costs apply to everyone, governments included. So, is it a total plus? Not in my opinion.

 

Nope. just capable of using basic economics consistently.

I'm merely referring to 'common sense': the Coase Theorem informs us that protecting property rights is not possible. Those against the tax alternative are therefore typically tacit supporters of the coercion associated with negative externalities.

Coase was critical of the theorem being used to say "therefore the market will solve externalities". The whole point is the importance of transaction costs. Its only in the most simplistic of cases that the market will succeed to internalise the externalities (and the idea that we can just use laws will provide a solution).

Not required. The theorem only requires an exchange of surplus (such that both parties are better off). Realisation that it only works in the most simplistic case only requires an understanding of transaction costs.

Seems strange to refer to maths when we're essentially referring to the building blocks of institutionalism.

You can't treat the deficit like an individual bloke's wallet! A deficit, for example, can increase growth such that surplus is then engineered. I don't try to oversimplify the macroeconomy for ideological splurge

 

That's quite a lot of words with still no example of how you see the theorem put to use. Would I be correct in assuming that how you see the theorem put to use is by taking means from where ever they exist to provide the needs that exist? And are you also proposing that property rights should not be protected, but instead distributed based on needs alone?

 

Don't play pretend! I've been very clear: the theorem can only be used in very simplistic cases. The idea that you can simply support laws to eliminate the externality problem is therefore alien to common sense.

Nope. I'm simply demonstrating that tax solutions cannot be avoided. Its illogical to suggest otherwise. And, as noted, those that do suggest otherwise are really just trying to coerce their ideological bent

 

Then please inform us as to what the very simplistic case it is that you feel we are discussing that the Coase thorem DOES flawlessly apply to?

Your responses are quite vague. Taxes are the solution to some problems, but not all problems. I've not implied that taxes should be eliminated entirely.

 

Already described it: there has to be low transaction costs. The textbook example is a polluter upriver and the brewery down river. The use of laws then assigns property rights and the externality is internalised through bargaining.

There was nothing vague about it. There are two means to internalise the externality: Tax and protection of property rights. The latter can only be used in rare cases.

 

How are you wanting me to interpet this 'textbook' example?

Is this meant to be applied to the above mentioned 'textbook' example, and if so how?

 

Bit obvious really: the Coase theorem only works in very artificial circumstances. Its about describing the importance of transaction costs after all

It was a summary of the 'common sense': tax is typically the only way that externalities can be internalised.