taxes

A skeptical take on efficiency money in Obama’s jobs plan

King Solomon, reputed to be the wisest man who ever lived, had the difficult job of deciding which of two women was the rightful mother of a baby they both claimed to be their own. Amidst their cries of claims and counterclaims, Solomon did something unique, unexpected, and very, very wise. He acted based on […]

When will we stop paying the hidden fossil fuel tax?

Last week, the nation suffered from major sticker shock when we learned that our use of fossil fuels comes with a hidden price tag of $120 billion per year.  Thanks to the results of the National Research Council’s report on energy and the environment, some of the extra costs of dirty energy were exposed.  (Full […]

Paterson’s Bold Carbon Gamble

California’s state budget gap was about $40 billion this year. New York’s some $50 billion. Every state in the Union is struggling with drastically lower revenues and higher costs for services of every kind, washing state capitals with red ink. At the polls next year, governors who are facing elections – – including Governor David […]

CBS’s Declan McCullagh promotes another false CEI attack on clean energy reform

Cross-posted from Wonk Room. According to Declan McCullagh, a libertarian blogger who works for CBS Interactive, secret Obama administration documents reveal that the cost of clean energy cap-and-trade legislation would be $1,761 per household — despite official estimates from the Environmental Protection Agency, the Congressional Budget Office, and the Energy Information Administration of about a […]

The soda wars heat up — and the possibilities are thrilling

To read the news, it would look like soda taxes are just around the corner. First, President Obama mildly suggested in an interview in Men’s Health that soda taxes were worth some consideration. Then Obamafoodorama broke the news of Coca-Cola CEO Muhtar Kent’s reaction to said soda tax: “I have never seen it work where […]

Green jobs: debunking the debunkers

Energy markets are neither free nor efficient, so traditional economic arguments against regulation and other government interventions do not apply.  In response to my recent article digging into green jobs, a reader sent me a copy of a March paper by Andrew Morriss et al at University of Illinois that attempts to debunk green jobs […]

If sticks don’t work, try carrots

For an $80 billion program, President Barack Obama’s cap-and-trade proposal is very short on specifics. His budget plan [PDF] provides only the briefest policy rationale for cap-and-trade, describing it as “a policy approach that dramatically reduced acid rain at much lower costs than the traditional government regulations and mandates of the past.” The acid-rain program’s […]

A love of delicious farm votes beef crosses ideological boundaries

In December, ranchers fell into a panic over a nonexistent EPA proposal to tax methane emissions from cows. By February, panic was replaced by giggling: how could they every have worried over something so crazy as a "cow tax"? And now, to demonstrate how badly misplaced their fears were, a Democratic and Republican Senator have joined together to enshrine in law the sacred principle that American cows shall never be taxed. Smell the bipartisanship.

Including cattle in a cap-and-trade system is, of course, a fine idea. From an environmental perspective, cattle are a major source of a wide range of ills: methane emissions, land use changes, nitrous oxide emissions, ammonia emissions, etc. If you tally up the negative impacts of beef on human health and productivity, the societal cost of cows climbs even higher.

From an economic efficiency perspective, it generally doesn't make sense to exclude sectors from a carbon cap. We want emissions reductions to come from the fastest, lowest-cost sources available, and it's hard to imagine anything cheaper or lower-cost than reduced beef consumption. It takes decades to shut down a coal plant. It takes no time at all to not eat a strip steak. Moreover, energy is a primary input to just about every sector of the economy. The same can hardly be said for tender, delicious short ribs.

A mileage tax may be the best idea that everyone loves to hate

This sort of flew under the radar, but a few weeks ago a federal commission floated the idea of eventually replacing the gas tax with a tax based on the number of miles driven each year. What happened next was odd: progressives, conservatives, and wonks banded together to proclaim a mileage tax to be a stupid idea.

A mileage tax is not a stupid idea. It may prove to be unworkable for technical, political, or even cultural reasons, but at root a mileage tax is both a very good idea and also possibly a necessary one as we undertake a shift away from the internal combustion engine. It's no surprise to see politicians (like Obama) run screaming from this proposal, but why are the pundits piling on?

Before delving into the specific arguments for and against a mileage tax, it's worth noting that the entire country of Holland is doing exactly what commentators have deemed stupid or impossible: starting in 2011, the Netherlands will phase in a vehicle-tracking scheme that applies dynamic pricing to every mile driven. Pricing will vary by vehicle type, time of day, and location, in order to curb both congestion and carbon emissions. The program is designed to be revenue-neutral, and because the government is simultaneously phasing out a steep motor vehicle tax, the plan should end up reducing the burden on low-income drivers. I mention this not to suggest that the U.S. can or should do exactly as Holland does, but just to point out that the concept isn't quite as crazily unworkable as some seem to think.