Taxing externalities increases economic efficiency which has major benefits to everyone rich or poor.
The trick is to avoid a swiss cheese patchwork of taxes designed to benefit specific groups and currently incentivizes private jets. Thus you want carbon taxes that make private jets significantly more expensive not a private jet specific tax.
The point of the economy is to maximize benefits while minimizing downside.
Burning fossil fuels cases problems such as respiratory issues, but it also has major benefits for the people doing it like being able to travel quickly. We don’t want to ban it, but you want your personal benefit while convincing other people to burn less because it harms you. Further you don’t want the overheated of a complex system because that’s expensive.
Enter a flat carbon tax where people can decide to keep doing everything the same way at the cost of paying more, but they also get cleaner air from the people who did cut their emissions. While the people who cut back get both cleaner air and the benefits from other peoples carbon taxes.
You do need to pick a reasonable tax rate, but you avoid the planned economy issues from say cap and trade or company specific EV subsidies.
Finally, the real benefit is when building new infrastructure. A 1 cent or even 10 cent per gallon carbon tax might not change your driving behavior but it’s going to convince many people to get more expensive but also more energy efficient systems because the ROI increases. Which then increases R&D and economy of scale for such systems, you basically get the benefit of a subsidy without spending taxpayers money.
Negative externalities such as climate impact are a cost that is not priced in. This results in higher production than is actually economically optimal.
What was the incremental taxation rate that should have been assessed throughout the industrial revolution to price in then-present and then-future externalities?
No one rate would have been perfect over such a long period.
All the way back in the 1600’s coal pollution was considered a significant problem which prompted legislation by King James I to restrict coal burning. There were few effective mitigation strategies, though ultra tall smokestacks were fairly effective in reducing harm to those in the imitate surroundings so very early on that may have been useful etc. Similarly outside of large cities the health effects where less significant.
That said, as recently as 1952 a single 5 day event killed 4,000-12,000 people in London depending on how it’s counted. So, the ideal rate would have been non zero even before climate change was a significant issue.
I agree pollution from the industrial revolution started long ago (i.e. King James I) and it's killed people recently (i.e London 1952). I agree the correct rate is non-zero.
There should be some average rate that approximates whatever instantaneous rate would have been instantaneously perfect.
We have the benefit of being able to look backward on this era with near-perfect information. A proposal for taxation for externalities that is historically calibrated has a chance of being adopted. Otherwise, it's just fist shaking and chanting "externalities".
A business that creates $1 of value by imposing $2 of costs on other parties is wasteful: the economy would be better off if such business models didn't exist.
For carbon these costs look like increased healthcare due to pollution, decreased agricultural efficiency due to weather changes, government paying for environmental remediation or carbon capture, loss of tourism when the USA and Europe is covered in smoke for large parts of the summer, ski fields closing due to lack of snow.
Why can't we let the free market sort this out? More than most externalities, carbon pollution is expensive to reverse: CO2 that costs $10 to suck out of the air might only cost a company $1 to not emit in the first place.
There's also a time component: if there were no taxes or fees for dumping waste we'd have a really efficient decade in the stock market then all be dead by the end of the century.
I'll admit that when they say "efficient" that word is doing a lot of work.
Disincentivizing private jet usage simultaneously incentivizes alternatives, the most analogous of which is buying at ticket on a major airline. Those airlines operate at economies of scale and are far more efficient in their use of fuel/person/mile than private jets. Less analogous alternatives would be setting up a remote meeting or phone call.
Put another way, this isn't just "politically choosing where the money goes," this is using the political machinery for us to determine what the cost of something is.
You could argue that we shouldn't use the political engines to do this, but that quickly runs against the fact that politics just means people, at large. Is why even "scientific communities" would have disagreements on what should be prioritized.
I do think we could do better, but I hesitate to offer a concrete better way due to my own ignorance in knowing of one.
To reduce carbon emissions in the aviation sector, we should steeply tax private jet travel and direct those funds toward climate mitigation and green infrastructure.
I'm guessing this is what your comment is replying to? I agree that there's really no need for the second part to solve the core problem - overuse of private jets.
I suppose you can make some arguments that we make money from military. But it always feels weird to say we need SS cuts when the data equally shows that we don't. Uncap the max on SS tax, and it would look hilariously fine.
Social Security and medicare are self funded via payroll taxes and aren't part of the federal budget. So that's like saying your health insurance premiums and 401K contributions are part of the federal budget, which is obviously ridiculous.
No, social security still is in surplus (the general budget owes it money because congress borrowed it). A lot of the money that is classified as "federal debut" is owed to social security (which is why we are in a situation where the USA owes a lot of federal debt to the USA).
In 2030 something, it will run out of surplus and become insolvent without actual injections from the general budget or via some other change, like removing the applicable income cap. Then you can say "SS is accounting fiction, I told you so", but in 2023 you can't say that yet.
Because SS and medicare are paid for via specific payroll taxes labelled as such on your paycheck (rather than any other tax levied by the government), the books have always been kept separate.
I'm curious if you could expand on what you mean about it being an accounting fiction. I've never seen anything that didn't show it would be fine without funds getting siphoned out of it.
I mean it doesn’t have an independent legal existence. You pay social security taxes to the federal government and the government pays out social security checks. It’s only political rhetoric that connects the two. At any time congress can alter anything about the system.
If your social security tax payments created a legally vested property right in some account, protected by the due process clause, then it would be a different situation—-not an accounting fiction.
Since it is the government, anything at that level would still be at the whims of, the government. Such that I don't really see your point? Are you wanting it to be argued that they'd have to pass a resolution to change whether or not they can use the funds? Isn't that basically what already happened?
You could argue that it could have been done in a different way, but the odds are silly high that that wouldn't have changed anything. Budgetary spend and allocation is controlled by congress, such that it would have only changed the nature of the resolution.
More, you would just be changing the nature of the "fiction." Akin to saying the federal reserve is separate from the government. I mean, yeah, but it is also established by the government. And I expect that winds of the controlling party would blow it about as well as it does the EPA and such.
The website is fine, it is your use of it that is wrong. From where I stand, those errors have been well-documented by other commenters, so I don't know that further writing on the subject is necessary. Or perhaps you have a more thorough rebuttal to what was a reasonable comment.
