A Conservative Case for a Carbon Tax
Fossil fuels are cheap. That's why we burn them. If alternative energy was cheaper, we wouldn't need any government action. And who knows, solar energy and electric cars might one day become cheaper than oil and coal. But we cannot count on it, not if global warming is an imminent threat. Today, conservation and alternative energy are expensive. A carbon tax, though by far the cheapest way to encourage conservation and alternative energy, still imposes costs on society.
But so do other taxes! Taxation is a sunk cost. As a replacement tax, a carbon tax has much appeal to conservatives.
A carbon tax is constitutional, even before the 16th Amendment. In practice, a carbon tax would be a combination of tariffs and excise taxes on coal, oil and natural gas. As such, these taxes would be the type of taxes envisioned by the Founding Fathers. A carbon tax could be the basis for real tax reform
A carbon tax could be used to balance the budget. Today's budget deficit is tomorrow's higher tax rate. Some conservatives remember this. A few, especially those of the John Birch Society school, realize that deficit spending is a subsidy to the old money rich, and endangers our national sovereignty. Alas, the deficit reduction argument is weakened by liberals calling for yet more gigantic social programs, such as socialized medicine. Many conservatives favor high deficits as a political tool to stave off such programs.
A carbon tax could reduce the trade deficit and strengthen the dollar. If we make the tariff higher than the domestic excise tax, we could cut the U.S. trade deficit substantially.
A carbon tax could get people working. Tired of lazy hippies and welfare moochers? Well, there is a reason for them: taxes on labor are too high. I recently did a study on how to make the income tax simple. In the course of that study I determined that the marginal tax rate on the working class quickly gets up to 30% — more when you factor in lost welfare benefits and insurance subsidies. When a worker works to buy the labor of another worker, the resulting end-to-end marginal tax hit is an astounding 51%!
A carbon tax would hurt our enemies. Today, radicalized Islam gets its funding from oil. When the U.S. buys oil, U.S. funds go to radical mosques around the world. Most of the 9/11 attackers were Saudi Arabian, yet we still call Saudi Arabia an ally, because we are so dependent on their oil. It is long past time to stop buying Arabian oil and spending billions of military dollars keeping the oil lanes open.
A carbon tax is incredibly simple and easy to collect. Oil goes to refineries. Coal goes into power plants and steel mills. Natural gas goes into pipelines. These are huge ugly installations, impossible to hide. The number of collection points is several orders of magnitude less than for income, payroll, or sales taxes.
A carbon tax is several orders of magnitude easier to compute than an income tax. Just measure the number of tons of coal, barrels of oil, cubic feet of natural gas. Simple! If we replaced the income tax with a carbon tax we'd have a millionfold reduction in paperwork at least.
Real conservatives really hate the income tax—even more than they hate hippie environmentalists. This should be an easy sell. The only question is pragmatic: is it possible to replace the income tax with a carbon tax? Let's run the numbers.