Carbon Taxes Aren’t Punitive Or Something

Carbon taxes are apparently about changing your behavior – as written by people who refuse to change their own (via Watts Up With That?)

Are Carbon Taxes The Solution To Global Warming?

There is a belief that taxes (such as carbon taxes) are punitive or punishing, hence the misconception that carbon taxes aren’t part of the solution set useful for climate change.

This is a common misconception, especially in the USA where taxes have been demonized and cut for decades, and politicians bend themselves into all sorts of silly shapes to avoid putting a tax on something. However, it’s a false assertion.

Taxes are a necessary mechanism for governments to raise money for their actions. They are also a key lever for changing consumer and corporate behavior, along with regulations. In behavioral economics, there’s something referred to as induced demand. This is a directly observable behavioral trait of groups. If something is cheap, people will figure out how to use it and more of it will be used. You can see this with building new roads which become congested almost immediately and you can see it with dumping sewage into rivers instead of treating it where that is allowed by lack of regulation and penalty.

Yet, taxes are not meant to be either punitive or for modifying the behavior of the citizenry. At least not in the American system. But, this is what Progressivism is about. Using Government to force compliance. They should remember one thing: what goes around comes around. What happens if Republicans, who control Congress and the White House, decide to impose a tax that is meant to modify the behavior of liberals? One that, say, taxes green energy projects in Democrat cities and states? Or lays a higher tax on mass transit? Who will this affect the most? Or, how about a moving tax for people who move from Blue states to Red states?

A couple are considering the purchase of a car, the second largest single expense most people have after their home. They want the most car for the money, they need to balance status with practicality, they need to balance her desire for an insanely fast corner carving beast with his relative timidity behind the wheel and the like. The price of gasoline and projected future price of gasoline is part of the conversation. A 20 mile per gallon car might cost a couple close to $1,600 in annual gas bills at $2.40 a gallon. A carbon tax might raise that to $3.00 a gallon which would increase their annual gas costs to perhaps $2,000, about $400 more. Meanwhile, a 50 mpg PHEV or a full electric car could drop their annual gas expenditure substantially. Filling up with electricity is half as expensive as filling up with gas at $2.40 a gallon on average in the USA, and closer to a third as expensive at $3.00. That means that buying an electric car might save them $800 without a carbon tax or up to $1,200 with a carbon tax. $1,200 is $100 a month. For most couples that’s material. They’re more likely to make a decision to buy a Chevy Bolt or a Nissan Leaf or a Tesla Model 3 instead of a gas car. They have a choice and are incentivized to make one choice over the other. This doesn’t penalize them, but it does shift behaviors to preferential ones.

This is Government forcing people to behave in a certain manner for essentially Wrongthink. This is why we have a 10th Amendment, and a Constitution that restricts the actions of the federal government. And, don’t forget that “what goes around comes around.”