"The Get America Working! approach would work, in effect, by correcting a major price distortion. The current U.S. Internal Revenue Code taxes employment far more heavily than it does the use of natural resources. This distortion has grown progressively worse as payroll taxes have grown. Revising this distortion would increase employment, equity and overall economic vigor importantly. And it would do so by responding to market price signals, not through clumsy and expensive government interventions."
Paterson's Bold Carbon Gamble
Date:
Fri, 10/23/2009
Source:
CNBC.com
Note: This article by the former head of the Califorina EPA and climate advisor to Governor Arnold Schwarzenegger praises New York Governor David Paterson for a "bold climate move." New York is part of the Northeast Regional Greenhouse Gas Initiative (RGGI), a market-based cap-and-trade effort of 10 Northeastern and Mid-Atlantic states which charges power companies for pollution "allowances." At a time of budget deficits, Paterson is using New York's hundreds of millons from RGGI (what Tamminen calls the "carbon piggy bank") on consumer energy efficiency programs. Tamminen writes:
". . . Of course, Paterson could have proposed higher taxes instead of raiding the carbon piggy bank. But is it a good idea to tax workers and businesses more, penalizing hard work, or is it better to essentially tax waste and thereby encourage conservation?
Many have suggested this very idea as a way to deal with climate change—tax carbon polluters, which raises the cost of electricity and gasoline—but lower taxes on payrolls and businesses. Such a zero-sum tax shift, it is argued, would reward hard work and discourage wasteful use of energy, both worthy outcomes. In any case, it would force users of energy to pay the true cost of their supply—a cost, measured in climate change impacts, that is borne today by everyone regardless of how much energy they use."
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