Free For All - The Free Liberal Blog: Carbon Tax Quibble

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Carbon Tax Quibble

Kevin Rollins rightly praises Tyler Cowen's call for the carbon tax. However, while Cowen's economics might be sound, his call for the "Phase out all forms of capital income taxation" seems to be less attractive politics than Carl Milsted's call to phase out social security taxes.

Step back and look at the politics. Carbon taxes will raise the cost of things like gas, which seems wise, given that burning fossil fuels is injurious to public health. However, carbon taxes will fall disproportionately on the less well to do. So, while Cowen's idea indirectly helps those who are most burdened by high taxes, Milsted's helps those who need the relief the most.

Cowen's play like a "soak the poor, help the rich" idea. Milsted's: "protect the environment, help the poor, or at least keep them even."

The optics of the Milsted plan plays better, IMO.

-Robert Capozzi

Posted by Robert Capozzi on November 25, 2006 07:41 PM | Permalink

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