Replace payroll tax with a carbon tax (Editorial)

2013-01-02T23:12:00Z Replace payroll tax with a carbon tax (Editorial) Mason City Globe Gazette
January 02, 2013 11:12 pm

If Congress and the president were more rational than political — admittedly, a very big if — they could kill a covey of birds with one stone. They could replace the payroll tax with a carbon tax.

Suddenly, Social Security and Medicare funding would be secure, which means the rest of the fiscal crisis would be fixed. Plus, you might save the planet in the process.

Instead of paying combined Social Security and Medicare taxes of 7.65 percent through payroll deduction, workers would keep that money.

They’d need at least part of it to pay for the carbon taxes on gasoline, natural gas and electricity produced by coal or gas plants. For example, if oil companies were taxed $20 a ton for the carbon dioxide their products created, they’d pass along the cost to consumers. The price of gasoline would go up about 20 cents a gallon.

Consumers, eager to save money, would look for ways to reduce their carbon use. Entrepreneurs, eager for ways to cash in, would look for ways to help them. Instead of a regressive flat tax on payroll, the carbon tax would be more efficient consumption tax.

Slowly, perhaps imperceptibly at first, carbon emissions into the atmosphere would be reduced. The temperature of the atmosphere would not go up so fast, perhaps stabilizing enough to avoid worldwide catastrophe. The Earth might be habitable for our grandchildren.

Liberal economists like the carbon tax. Conservative economists like the carbon tax. Environmentalists like the carbon tax. So why not do a carbon tax instead of fooling around with spending cuts, tax expenditures, payroll taxes, plan Bs, sequestration and all the rest of the fiscal cliff discussion?

Because the politics of it will be really, really hard. Because many politicians are still in hock to the fossil fuel industry. And because many people, Superstorm Sandy and Superdrought 2012 notwithstanding, would still rather pretend that global warming is not real.

James Lawrence Powell, a former member of the National Science Board under Presidents Ronald Reagan and George H.W. Bush, did a broad search in scientific journals for every peer-reviewed study of climate change and/or global warming since 1991. He found 13,950 of them, the combined work of 33,690 scientists from around the world. Precisely 24 of the 13,950 studies rejected global warming. End of debate.

As Elizabeth Kolbert noted in the Dec. 10 edition of The New Yorker, the carbon tax is an almost perfect solution to what economists call a “Pigovian” problem created by carbon emissions. In 1920, the British economist Arthur Pigou noted that certain private investments impose costs on other people. You fill up your gas tank, you get the benefit of transportation. The gas station, its distributors and the oil company all make money. But the cost of the carbon emissions are borne by society in the form of climate change.

A bridge or highway toll is a classic Pigovian tax. Federal and state gasoline taxes that go to build and maintain roads and bridges are Pigovian.

A carbon tax would require those who use fossil fuels — which is everyone except a few people living way off the grid — to pay for the social costs of global warming up front.

Most believe a carbon tax should be revenue-neutral, that is whatever new revenue it produces should be offset by tax cuts elsewhere. Liberals, on the other hand, see not only environmental benefits in a carbon tax but a source of new revenue needed to reduce benefits and balance the budget without cutting other spending programs.

This dispute — revenue-neutral vs. new revenue — will dominate carbon tax discussions should Congress ever get around to debating it. There will also be debate over how high the tax should be.

The Intergovernmental Panel on Climate Change has estimated that a carbon tax of $80 per metric ton of emissions could keep disaster from happening by the end of the century. Other experts have said that’s too low.

An $80-a-ton tax would cause gasoline prices to go up 70 to 80 cents a gallon. In a rational world, that would be the goal, with the carbon tax offset by payroll tax cuts and perhaps tax rebates to low-income Americans. It would also have to be accompanied by carbon tariffs imposed on goods imported from countries that are not addressing the problem.

The debate won’t start at $80 a ton; indeed, given the power of the fossil fuel lobby, it won’t begin until several more years of killer storms, flood and drought. In a rational world, the debate would be well under way.

— By The St. Louis Post-Dispatch, another Lee Enterprises newspaper.

Copyright 2015 Mason City Globe Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(31) Comments

  1. Jake7777
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    Jake7777 - January 06, 2013 4:00 pm
    We have had warm winters and drought the last year. The global warming people say that is because of "global warming".

    China and Russia are having the coldest winter in 40 years with record snowfall. At the end of an article about this extremely cold and snow winter, the global warming people said.... you guessed it...." it's because of global warming melting the polar ice cap and sending all this moisture and extreme cold down to China and Russia". GLOBAL WARMING DID IT!!!!
    Report Abuse
    RED STATE - January 05, 2013 5:09 pm
    Biden should disgusting.
    Report Abuse
    RED STATE - January 05, 2013 5:07 pm
    Ally: What?

    Hey, hit me with your credible link that proves your allegation about Romney not paying any income taxes in 'recent years'. I see a LONG list of credible links disproving your allegation... care to share your source?

  4. libertylover
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    libertylover - January 05, 2013 11:49 am
    Why BO was reelected is still a mystery. The most credible report I've heard is that the unions paid drivers to pick up know-nothings from various places i.e. RR tracks, homeless shelters, half-way houses, nursing homes, etc., those who had no intention nor desire to vote for either man, and deliver them to early voting locations in the swing states, where they obediently voted for BO. They had to be know-nothings. Nobody who knew anything would have voted for him.
  5. LGBTAlly
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    LGBTAlly - January 05, 2013 11:08 am
    It would seem that a man would want to think at least twice before referring to himself as "Debbie Downer.
  6. LGBTAlly
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    LGBTAlly - January 05, 2013 11:07 am
    The Blaze is just than The World according to Glenn Beck.
    Report Abuse
    RED STATE - January 05, 2013 6:44 am
    It didn't end there.......Watch and listen to his comments.
  8. JB Johnson of Britt
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    JB Johnson of Britt - January 05, 2013 6:24 am
    Biden is off his rocker. Anyone else who said what he said to that woman would be run out of office.
  9. AL4USA
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    AL4USA - January 04, 2013 10:33 pm
    I think Democrats should be pay a 25% "social tax" to support the values and policies they support. And, btw, why does the DNC, Obama Administration and the msm provide cover for the clearly sick individual that is VP when he degrades women verbally and physically? In front of media no less. Total unprofessional.
  10. rhino_59
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    rhino_59 - January 04, 2013 4:03 pm
    Meanwhile, Al Gore and the rest of the folks who are beating the "Global Warming" hoax drum the loudest - and screaming that you're a "flat-earther" if you deny them - they keep running around in their gas-guzzling, carbon-emitting private planes and huge SUVS and cars. But oh - they can do that and buy "carbon offsets" to offset their consumption.....

  11. rhino_59
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    rhino_59 - January 04, 2013 4:01 pm
    Man, I hate to be "Debbie Downer" here - but the facts get in the way of this story - according to the Hadley Centre and the Climatic Research Unit in Britain, temperatures rose slightly from 1980-1996, but since 1996 they haven't risen at all.

    Follow the money, people. This global warming hoax isn't about science - it's about MONEY. The U.N. wants our money - so they propose a carbon tax. Al Gore wants your money - so he scares you into thinking you need to ride a bike, not a car.
  12. libertylover
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    libertylover - January 04, 2013 3:02 pm
    The majority of voters reelected a man who wants to bankrupt the country (destroy it) so the majority of voters may be stupid enough to pass the
    "pollution tax." Sad and frightening. When J.B. and others like him stop delivering food to the grocery stores, the stupid may finally understand what is going on. I don't know why BO hates America, but it is beyond doubt that he hates it. Sadly, even we who are able to understand the truth will suffer.
  13. LGBTAlly
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    LGBTAlly - January 04, 2013 2:26 pm
    The carbon tax is basically a pollution tax. More about the concept is posted at

    It was the subject of a recent poll, as reported here:

    The subsidies to the big oil companies should be eliminated, and corporate loopholes firmly closed. If/how that could happen with their PAC and lobby power is doubtful.

    Report Abuse
    RED STATE - January 04, 2013 7:23 am

  15. JB Johnson of Britt
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    JB Johnson of Britt - January 03, 2013 9:56 pm
    as compared to just printing more money and making what cash you have worth less. Or we could just pass the bills onto to our kids and let them clean up the mess because we overspend
  16. libertylover
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    libertylover - January 03, 2013 9:44 pm
    I think they should levy a tax to pay our costs to fly to Never-Never land. Then maybe a tax so that we can all go on an expedition to find Big-Foot, or the Loch Ness monster, or maybe even Godzilla.
  17. Jake7777
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    Jake7777 - January 03, 2013 1:06 pm
    How about thi

    1. Wipe out the Federal Education Department. It takes out hundreds of billions of tax dollars from the states, takes out a huge cut for tens of thousands of Federal bureaucrat employees, then returns some of the money the local schools.

    2. Wipe out the Federal Energy Department and save hundreds of billions of dollars more. You name one real, actual energy improvement in the U.S. that is due to the Energy Dept.
  18. rivercityfan
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    rivercityfan - January 03, 2013 12:25 pm
    And it won't effect the super rich.
  19. rivercityfan
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    rivercityfan - January 03, 2013 12:24 pm
    This idea leaves a lot of people out of the equation of payer. And as usual the most diligent will suffer the most. The tax cost will be passed on to the consumer. But only consumers who pay housing, drive cars,work etc.. The lazies won't feel a thing except the same benefits they confiscate from the working bees.
  20. rivercityfan
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    rivercityfan - January 03, 2013 12:17 pm
    cooling? When it's 50% in Dec. I don't know how you can say it's "cooling". I've been around a few Summers and Winters and it gets warmer every Winter. We're lucky if Winter starts before Xmas. And it's shorts weather in March. It's mid December ot later anymore that the lake freezes over. Here in NI I'd say it sure isn't cooler. Esp. in Winter.
  21. rivercityfan
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    rivercityfan - January 03, 2013 12:13 pm
    d**n liberals. Always wanting to help others.
  22. rivercityfan
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    rivercityfan - January 03, 2013 12:13 pm
    And which programs would yopu like to see cut 1st? Are you prepared to take gramma/grampa home and take care of them 24/7 and buy all their meds with your wages? How about school lunch programs for poor kids who's parents are too ignorant or lazy to get out of bed and feed them or work. How about unemployment so when a company folds and you're jobless for months you can still feed your kids. Which one do you wanna slash
  23. rivercityfan
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    rivercityfan - January 03, 2013 12:09 pm
    Since alcohol became a legal drug.
  24. rivercityfan
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    rivercityfan - January 03, 2013 12:08 pm
    Or they're seriously lacking brain cells from alcohol useage. The "legal" drug.
  25. Jake7777
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    Jake7777 - January 03, 2013 10:47 am
    They have all got to be using dope over there to publish an editorial like this. Since when do dopers require other dopers to take a drug test??? Hahahahaha......
  26. thumper1
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    thumper1 - January 03, 2013 8:24 am
    Silly people, when does Congress ever get rid of a tax? There will be a carbon tax, allright. It will be added on top of any current taxes. Tax and spend, tax more and spend more, tax even more and spend even more.....
  27. RJ
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    RJ - January 03, 2013 8:05 am
    A carbon tax is a regressive tax. If electricity rates go up I can afford new energy star appliances to lower my electric use. A low income family can't. Low income people are more likely to live in a smaller community and commute to a job in a larger city because housing is cheaper. They end up paying more because of their higher gasoline use for commuting. Lower income often live in less well insulated homes which means higher utility bills and a higher tax.
  28. xxx
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    xxx - January 03, 2013 6:55 am
    The global warming fraud was exposed a few years ago, so such tripe makes you lame-stream media look even lamer. You can look at a source of data as close and accurate as ISU's compilation of GDUs (growing-degree units for you public school graduates) per year. A quick look reveals that temps have been cooling since at least 1979.
    Report Abuse
    RED STATE - January 03, 2013 6:38 am
    The new normal is tax increases--elections have consequences. Payroll tax has ALREADY increased JAN 1st and It is a safe bet we'll get socked with a carbon tax, too. Like the author said, "the debate is over".

  30. Jake7777
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    Jake7777 - January 03, 2013 4:02 am
    Yes, the carbon tax is a perfect tax for liberals. The recent budget plan that prevented the "fiscal cliff" required $1 spending cut for every $41 tax increase. Let's see.....if the carbon tax is set at $80 per ton, liberals should be able to come with at least $3,200 per ton in new spending programs.
  31. JB Johnson of Britt
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    JB Johnson of Britt - January 02, 2013 11:44 pm
    After the HR dept reads this somebody is going to fail a drug test.
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