February 29, 2016
Paul Krugman, writing in the New York Times, suggests that Americans should pick a president who favors a carbon tax. But not even Democratic candidates Hillary Clinton and Bernie Sanders have proposed a carbon tax as part of their tax plans.
What is a carbon tax? Why do so many academics and columnists love it? And why will Congress be unable to enact such a tax effectively?
No matter that only 16 percent of global greenhouse gas emissions are caused by America, and that by many measures global temperatures have not increased over the past decade. No matter than unless China and India reduce their carbon emissions, U.S. unilateral efforts will have no practical effect on global temperature. China has stated that it will reduce emissions in 2030, but has not made any definite commitment.
The carbon tax is a favorite of many academic economists for restructuring the tax system. Proponents include a bipartisan group of professors such as Tuft University’s Gilbert Metcalf, now Deputy Assistant Secretary for Environment and Energy at the Department of the Treasury; Harvard University’s Martin Feldstein, Edward Glaeser, and Gregory Mankiw; and Columbia University’s Joseph Stiglitz.
However, as tax practitioners know, a carbon tax is complex to set up. It requires adjustments to make sure that the tax is not unduly regressive and does not encourage consumption of imports relative to domestic production.
Read the full article at Economics 21: Presidential Candidates Stay Away from Carbon Tax