Comment by macspoofing | Hacker News Reader

Comment by macspoofing | Hacker News Reader

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That's fine, the problem is what to do with the tax money.

Ideally you want to return the collected tax money back into the economy through a general tax cut/subsidy. This way you incentivize good behaviour (carbon emission minimization) but limit impact on the economy. Most economists favour this approach.

The problem is environmentalist and progressives will not support this scheme because they would rather take the collected tax money and redirect it to their pet causes. This is what happend with Washington's Initiative 732 [1] - and why ENVIRONMENTAL groups brought it down (because fuck helping the environment if socialism doesn't come along for the ride)

There is insanity going on in progressive circles that is completely detrimental to fighting climate change that dwarfs conservative denialism.

[1]https://en.wikipedia.org/wiki/Washington_Initiative_732

> What to do with the tax money

You return the fee directly back to the people. In fact there’s a bill in Congress proposing exactly that and it’s overwhelming supported by progressives.

https://energyinnovationact.org/

use the tax to pay off government debt?

Even then, the principle still stands. If you want to pay off government debt, budget for it and pay it out of general revenues (minus carbon tax) or cut spending. Don't tie to a specific tax from a specific policy - because then you're incentivizing government behaviour that is not conducive to what the tax is trying to solve, like the fact that you may want to raise or lower the carbon tax not because it is good environmental policy, but because it is good for lowering the deficit (or funding more rooftop gardens or whatever) - which defeats the purpose!

Worse, once you start relying on this revenue, and this revenue goes down (as people use less carbon) - you're going to get yourself in trouble.

This reminded me of the counties (or whatever) that became reliant on fines from big tobacco. The incentive for the tax collector is, absurdly, to keep the negative externality going.

Maybe good economic policy should examine both ends of the wealth transfer: is it good that we take money from eg. big oil, and meanwhile also good that we put the money in the govt. budget? But most political talking points are one sided: “X should pay” or “Y should get paid.”

The purpose of the tax is to disincentivise the use of the taxed entity or pay for the cleanup. In the equilibrium, there is no money left over.

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