Is a Carbon Tax Good for the Economy?
Last December, Gov. Schwarzenegger tasked a 14-member commission to come up with new sources of revenue for the state that could put an end to the feast or famine revenue cycles seen in Sacramento. The Commission on the 21st Century Economy met on the campus of the University of California, Berkeley last week to hear testimony on one revenue option: a carbon tax.The bolded bits are more an opinion of the writer/speakers than a fact. Regular readers know our position on the use of proceeds, 100% return to the taxpayers.
The idea behind a carbon tax is to tax the use of fossil fuels and use the money to invest in the development of clean energy.
“The simplest way to tax carbon-based fuels is through a gas tax,” said Fred Silva, senior fiscal policy advisor for California Forward, a bipartisan organization that focuses on governance reform. The state already has a gas tax, so all it would have to do is simply increase it, said Silva, who attended Tuesday’s meeting....
...A carbon tax is undoubtedly a potential pot of money for the state, but the revenue stream has its drawbacks.
Borenstein highlighted two key issues with a carbon tax: the disproportionate impact on low-income households and the impact on the economy.
At a recent news briefing on the state budget crisis for ethnic media in San Francisco, organized by New America Media, journalists voiced concerns about the impact of increased taxes on low-income households and small businesses. Speaking at the event, James Mayer, executive director of California Forward, said the Commission was discussing three options to boost state coffers: 1) expansion of the sales tax to more services, 2) a carbon tax, and 3) a tax on commercial properties.
Mayer said the impact of a carbon tax on low-income households could be offset by reinvesting some of the money into public transit. California Forward is hosting several regional meetings to inform the public about changes to the state’s tax system.
Commissioner George Halvorson, chairman and CEO of Kaiser Foundation Health Plan and Kaiser Foundation Hospitals, suggested using a portion of the revenue from a carbon tax to offer rebates to low-income households or a tax credit on the purchase of energy efficient appliances or a fuel efficient car....MORE
From EcoWorld, a site I've followed because of their (eclectic?) coverage of the California state employee pension plans, comes:
Carbon Taxes & Public Sector Pensions
About a year ago I participated for a few months with an industry group that was attempting to insert some rationality into what is probably the most irrational, extremist, dangerous, job-killing, regressive laws in the modern history of the United States, AB32, California’s Global Warming Act. Unlike renewable portfolio standards, which can at least be justified by virtue of their potential to improve the U.S. balance of trade and promote energy independence, California’s global warming act is based on uncertain science and propelled by political opportunism....Okay, that gives you a taste of where they land on the ideological continuum.
...While interacting with these lobbyists and public relations professionals, I ventured a theory that was met initially with skepticism, and later with growing acceptance. I suggested that the biggest source of looming government deficits was the underfunded pensions for public employees, and since public employees, through their unions, control our state and local governments, of course they will welcome any law that allows “fees” to be imposed to mitigate global warming, since the scale of these “fees” is estimated to be in the hundreds of billions of dollars, and nothing else can hope to eliminate deficits and make their pension funds solvent.Some of our previous posts on CalPERS/California:
This is the reason we discuss the issue of public sector reform in this green publication. Global warming payments that flow from the private sector into the public sector - via taxes, fees, and sale of emissions allowances, are the biggest way public sector entities may avoid bankruptcies and drastic roll-backs of their benefit packages, which now exceed that of average private sector workers by a factor of 2-4x....MORE
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