So Crazy it Just Might Work

November 18th, 2011 at 8:39 am David Frum | 6 Comments |

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The Ontario government’s competitiveness task force–chaired by the dean of the University of Toronto business school–has proposed lower tax rates for business investment, offset by a new carbon tax.

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6 Comments so far ↓

  • Graychin

    It sounds like a great idea. It might even work – in Canada.

    But in the USA, that ship sailed a long time ago. I don’t expect to see a sensible carbon tax in my lifetime. One of our major political parties has dug in, no doubt for the life of this generation, against anything resembling a carbon tax.

    And don’t forget that a carbon tax is intended to combat a problem that this political party believes does not exist – global warming from human-produced CO2.

  • forgetn

    BTW David this is not a tax reduction, its a shift in burden so that the social costs of polluting are fully priced. I am almost certain that Ontario business will want the tax cut, but will do everything they can to scuttle the carbon tax aspect.

    I wish them luck, especially since Ontario will not increase the number of carbon tax credit — making them more expensive over time.

    First test of applied taxes on a common good (or bad): Pollution

    BTW for the GOP land this will increase uncertainty — so its got to be bad right. Because, the number of carbon credit will be made by fiat decision

    • LFC

      …its a shift in burden so that the social costs of polluting are fully priced.

      Agreed, and I believe that it’s the appropriate way to go. The costs of pollution need to be borne by those who cause it. And no, that doesn’t necessarily mean just the power companies because the costs will be at least partly passed on to the consumers. So businesses and individuals with high energy consumption will pay more. As that cost rises, efficiency ends up with a better cost/benefit ratio. Right now the benefit of greater efficiency is artificially suppressed by our half-measures of pollution control.

  • buddyglass

    No offense, but this swap sounds like a big win for the wealthy and a not-so-great deal for everyone else. It’s the rich that derive a disproportionate amount of their income from business investment. At the same time, they spend a disproportionately low percentage of their income on energy (i.e. gasoline and electricity) compared to those with smaller incomes.

    • ztakdivad

      Increased energy costs affect all products and services that have energy as an input; which is everything. In this way, they are like sales or consumption taxes, which are generally held to be regressive.

  • beowulf

    Clever plan. Its one of the mysteries of the world why Obama and the Democrats chose to push a 1200 page carbon cap and trade bill (which never came close to getting 60 Senate votes) when there was a 16 page REPUBLICAN carbon tax bill that would devote every dollar raised to cutting Social Security FICA taxes for employers and employees alike.
    http://flake.house.gov/News/DocumentSingle.aspx?DocumentID=126315

    If it came down to it, could have been tacked onto the filibuster-proof reconciliation bill used to amend Obamacare. That legislative dead end was motivated by the same brand of stupidity/corruption that saw Obama pushing that 2000 page insurer bailout bill that commenced 4 years out instead of the 60 page (and reconciliation-eligible) universal Medicare bill sponsored by Pete Stark. Stark’s Americare bill would’ve both cut National Health Expenditures and provide 100% universal coverage within one year of enactment.
    http://my.firedoglake.com/selise/2009/06/12/drsteveb-strong-public-option-100-coverage-cost-control/