A Carbon Tax Is An Economy Killer, Too
Nicolas Loris /
In response to the Waxman-Markey cap and trade bill to reduce carbon dioxide and other greenhouse gas emissions, GOP lawmakers Bob Inglis of South Carolina and Jeff Flake of Arizona are set to introduce carbon tax legislation.
A carbon tax is a direct, more predictable tax on carbon emissions, but that does not make it any more acceptable. Proponents argue that it is better than a cap and trade because it will not unpredictably fluctuate with the ebbs and flows of the market as evidenced by Europe’s carbon trading problems.
Regardless of the efficiency of a carbon tax, any tax to reduce carbon dioxide similar to those proposed in cap and trade would cause significant economic damage and would do very little to reduce global temperatures. Furthermore, the economic pain of higher energy prices will reduce disposable income for other goods and services. Once the economy expands, bureaucrats would likely raise the tax on businesses, which would ultimately be passed on to the consumer.