A Conservative Case for a Carbon Tax

OK, now it’s time for the conservatives and libertarians to whine. “Yet another tax!? We are already overtaxed!!”

This is a reasonable argument. We are overtaxed. Yet another tax could be very hard on the economy. Even cutting greenhouse emissions the most efficient way is still expensive.

But let us suppose we could use a carbon tax to replace one of our other taxes. While it is true that a carbon tax will damage our economy, it might do so less than one of our existing taxes.

Consider the personal income tax. To collect it, the government needs access to the accounting records of every single business in the country. It needs salary information on every individual who has a job, as well as personal information on them and their families. This is a potential civil liberties nightmare. The government could abuse this information. Wait! It already has! The government has added deductions to encourage people to maintain a mortgage, to give to IRS-approved charities and religions, and to pre-pay their medical expenses. The results include an overproduction of McMansions, emasculation of the churches, and exploding healthcare costs.

Then throw in the fact that it takes thousands of pages of laws, regulations and rulings to define what constitutes income, and you have a regulatory nightmare that is a huge drain on our time, treasure and freedom.

Compare the above to a carbon tax. We could collect such a tax at a few centralized locations: oil refineries, tanker docks, pipelines, power plants and steel mills. These installations are large and ugly – very difficult to hide! Enforcement is easy without the need to shred the Bill of Rights. Finally, we are measuring tons of uniform substances vs. the bottom lines of millions of unique accounts. We can reduce enforcement and compliance costs by a thousand-fold at least!

The reduction in compliance costs could very well offset the costs of conservation and alternative energy use. We could justify going to a carbon tax on this basis alone, even with zero proof of global warming.

We can also make some moral arguments in favor of a carbon tax:

• A significant fraction of our military budget is going toward protecting Middle East oil fields. These costs should be paid by tariffs on this oil for this reason alone.
• To the degree which burning fossil fuels harms people and property, a carbon tax is a pollution tax, a fine for damages caused.
• The followers of Henry George would point out that a significant fraction of the income of those who own oil fields and coal mines is unearned wealth – wealth not generated by humans but given by God [Leviticus 25]. As such, society does have some moral standing to divide up the unearned part of this income in an equal fashion. (This is not the case for income in general.)

Further Reading

• The Sky Trust is a proposal to have something like a carbon tax but instead of using it to finance government, the revenue should be divided up equally. See also www.usskytrust.org.
• There are other proposals for taxing bad things such as the Green Tax Shift movement (www.progress.org/banneker/shift.html).