Friday, June 20, 2008

Again with the Carbon Tax!

Most of what I find wrong with Cap-n-Trade can be found in this article. It basically highlights that the Process has turned into general lobbying Politics, with increasing Carbon emissions, and literally a decrease in Investment in Carbon-conservative technologies. It is the likely Outcome of any such system in the United States. The final failure of such a Cap-n-Trade formula will come in the form of Court defense that sufficient Carbon Permits cannot be purchased to maintain the business structure, which every major Carbon emitter will likely use as Challenge in any application of Fines. The real Answer is a Carbon Tax, especially a Progressive Carbon Tax where emitting Carbon above an industry Standard gets One an additional 70% increase in Tax.

Current Economic Thought registers a proclaimed Goal of revenue-neutrality in any form of additional taxation. No one has positively proved that Tax reduction actually favors the conduct of Business. Ever since the Kennedy Tax Cuts, Economists have extolled their great advantage, but that advantage did not develop until after a huge Government expenditure for the Vietnam War, and yet again, Cutback from these Expenditures led almost immediately to a downturn of the Economy, in spite of the Tax Cuts. The combination of Tax Cuts and War expenditures did bring Us a healthy Inflation rate until the Fed passed truly repressive measures. I seriously doubt if the absence of revenue-neutrality in a Carbon tax will bother the current economy any more than its current hazards, and a downturn of Expenditure in Iraq and Afghanistan will lead to a economic downturn anyway, whenever such occurs.

The Carbon Tax pleases me in other ways. Corporations and Business has been shedding their Tax burdens from the Time of the Kennedy Tax Cuts. The Tax Load has been shifted to the shoulders of Consumers and Income-Earners, with multiplex methodologies for high Income-Earners to shed their Tax liability through Retirement and Deferment mechanisms. I understand the standard Economic argument that all Business taxes are actually paid by the Consumers. A Carbon Tax, though, has the advantage of Collection and Payment by Business interests, prior to it being recorded as Personal Income. Business has an easier Job of making complicated and large Tax payments, and Personal Incomes possess the ability to Expense the Tax liability as loss of Income. This may not seem like much, but it could probably increase Personal after-tax Income by a probable $20 billion; this while the same amount of Carbon Tax is paid. Cap-n-Trade has no possibility of easing the Expenditure patterns of either Business or Consumers. lgl

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