Comments on: My Climate Plan

By: Michael

Michael — Fri, 04 Sep 2009 20:10:01 +0000

Scott, I don’t think any of this is going to work at all. Either at the individual level or national level. I’m just wondering how Coyote sees keeping the tax revenue neutral, reduce co2, and not cause harm to the economy, since I don’t see carbon fuel use as very elastic.

If the Coyote plan was a 30 to 40 year plan, where electricity comes from nuclear power, and transportation combustion is hydrogen based, then at some point in this transition a carbon tax might be useful.

But really, if co2 was a real threat to people, carbon fuels would be headed for an outright ban. The cap and trade, carbon tax, credits for windmills and solar panels is all just basic progressive politics. Taking money from producers and giving it to favored leftist groups while achieving nothing.

By: Scott

Scott — Fri, 04 Sep 2009 16:37:23 +0000

Michael, how would you manage that? How do you account for the person that makes $1000 but still only buys 3 units and the person that makes $100 and buys 3 units? Are you just going to assume a base consumption? So each person has their income adjusted up by the extra $30 they are now having to spend on A? That works well enough with our really simple example, but how do you translate that to the much more complex real world which you’ve got 100 times more variables to consider (vehicle usage, mpg, vehicle type, etc). Does the guy that can ride his bike to work and makes $400 a week deserve the same tax benefit as the guy who makes $400 and buys a tank of gas every week so he can get to work?

By: Michael

Michael — Fri, 04 Sep 2009 16:10:44 +0000

Scott, that is how I envisioned this working with the addition that income taxes would be cut so the remaining income level of $45 would be restored to the $70 level.

I just didn’t see how there could be much elasticity in carbon fuels to reduce co2 without a readily available substitute.

One thing I noticed is that some people lump electricity (carbon and non carbon produced) in with internal combustion. Like the Pickens’ idea of build windmills so we can run our cars on natural gas. One has nothing to do with the other.

By: Scott

Scott — Fri, 04 Sep 2009 15:25:30 +0000

Income taxes. I know how SS, Medicare, and unemployment taxes (paid for the “company”, ugh) are lumped into the tax revenues for the sake of government spending, but personally I find that practice deplorable.

Anyway, I don’t support this idea of any sort of carbon tax. I think at the base of the issue we’re just trying to create some faux sense of control over our world which I really believe we do not have.

Coyote, your new example is invalid. What you’re describing is a classic product substitution scenario. The problem is for the angle you’re looking at it is that all the items A, B, & C have to be interchangeable/substitution goods. So it works if you’re talking about the dynamic between, say, Dr. Pepper, Coke, and Arizona Ice tea, which at their base are all pretty much the same product and… if push came to shove you could do without all of them. But with fuel you’re dealing with a product that has no readily available substitute. So your example should go something like this.

You’ve got your items A (fuel), B (Soda), & C (DVD). In the origination of the scenario you’ve got an income of $100 a week and each of the items costs $10 per unit. Now, in order to continue making income and to go get (or have delivered to you)the other products you are required to purchase at least 3 units of A ($30), your remaining income ($70) can now go to A, B, or C as you feel fit. Now, in the modification of the scenario you’re now bringing home $105 a week, but the cost of A has been increased to $20. You still have to buy 3 units of A ($60), and then you’ve got your remaining income ($45) to spend on A, B, or C as you wish. True, you are now less likely to buy more of A then you have to, but you are also less able to buy as many of B & C as you were before.

As long as fuel is a required purchase/good, increasing the cost of it is only reduce the overall available available income for spending on other goods/services.

By: Michael

Michael — Fri, 04 Sep 2009 04:14:30 +0000

Scott, what would you define as a payroll tax? There is SS, medicare and unemployment. What could the federal government cut to offset the fuel tax?

By: Scott

Scott — Thu, 03 Sep 2009 13:19:24 +0000

MJ,
1. Could… the effects of artificially doubling the price of fuel over any period of time is an arguable subject, kinda like looking into a crystal ball.
2. What increase in incomes? The plan is to offset increases in fuel prices with decreases in payroll taxes. The amount of free income is not changing. However the COGS is increasing with the increase in transportation & production costs. So unless businesses decrease their employee’s incomes to match… prices will go up.

By: macquechoux

macquechoux — Thu, 03 Sep 2009 13:09:06 +0000

“Cut payroll taxes by an amount to offset the revenue from #1. Make the whole plan revenue neutral.”

Er, Coyote, what about us old folks that are currently living off declining dividends and sinking rates of returns on bonds and other modest savings? Whether it be cap & trade or a pure simple carbon tax a la Mankiw my cost of electricity, natural gas, gasoline, and every other good that I consume would increase. What would be my offset? What am I missing here?

Confused elderly fan.

By: Ian Random

Ian Random — Thu, 03 Sep 2009 11:47:53 +0000

I really want it to have hard targets for energy producers. If consumers use too much and they exceed their quota, they shutdown with no loopholes. Kind of like Kulifornia a few years ago, when they wouldn’t let the producers put a barge mounted generator in the bay. Then people can sit in the dark while contemplating global-hothouse-warming-greenhouse-climate-change and pray for the wind to pick-up or the clouds to dissipate over their solar cells.

By: MJ

MJ — Thu, 03 Sep 2009 01:42:44 +0000

Hell, increased fuel prices mean increased prices for damn near everything in our economy. The reduction in payroll taxes going to account for that? Taxing fuel by dollar amounts is an incredibly bad idea.

I disagree for two reasons:

1) A fuel tax could be implemented gradually, in order to smooth the transition toward higher energy prices. Plus, there would be offsetting adjustments made by consumers to reduce demand. The resulting impact on prices would be very small and not abrupt.

2) Any increase in prices would be countered by rising incomes resulting from the payroll tax cut.

By: Nozzle

Nozzle — Thu, 03 Sep 2009 00:49:43 +0000

Nuclear power was once viewed as a gift from god…The US Navy pioneered nuclear power and have been “underway” on nuclear power for over fifty years…It has proven to be safe and reliable. Has their even been one death in the USA which can be attributed to nuclear power? The lunatic fringe co-opted this important energy source and denied the public a clean safe modern source of electricity. Now, that we are importing seventy percent or so of our oil and sending hundreds of billions of hard earned dollars overseas. All the while, our leaders are debating the modern equivelent of how many angels can dance on the head of a pin as they discuss global warming and carbon taxes as a means of controlling the climate…We are fools if we don’t put this important form of energy to work in order to reduce our dependance on mostly foreign oil…Our energy policy or lack therof is approaching the point of being a national security emergency.