Why do we need a carbon tax? A study by John Reilly candidly “explains” (albeit indirectly) why this is not and has never been about the environment. It’s all about power and money — specifically $1,500 billion dollars of it over 10 years. What better excuse to raise funds for politicians? They pretend to save the planet and use the funds to buy votes from people who don’t realize that they themselves pay for the “free” handouts — if not with their dollars, then with their jobs.
This is another piece of magic-pie economics:
A carbon tax would take pressure off Congress to find “tradeoffs” between closing the deficit gap and reviving the economy, according to John Reilly, an author of the study.
“Congress will face many difficult tradeoffs in stimulating the economy and job growth while reducing the deficit,” Reilly, the co-director of MIT’s Joint Program on the Science and Policy of Global Change, said in a statement.
“But with the carbon tax there are virtually no serious tradeoffs. Our analysis shows the overall economy improves, taxes are lower and pollution emissions are reduced.
The study found that taxing carbon at $20 per ton would generate $1.5 trillion in revenue in a 10-year period. That could be used to reduce corporate and personal income taxes and maintain social services spending, all while reducing the deficit.”
So if there are no tradeoffs, why not make the price $40/ton? Why not $100? $1,000?
The report writers assume that governments would use the revenue to decrease other taxes, so it would not increase the size of government. But putting aside the fact that governments are all too willing to promise cuts they never deliver, it’s never good policy to make policy for the wrong reason. There are always perverse outcomes. If the US wants a flat tax, then do suggest one, but don’t make a monster out of a fertilizer-gas.
Since the tax applies to energy use, it would impact everywhere, but have more effect on production of goods than of services. It would “Giddly-Up” the galloping decline of manufacturing in the US. Information services jobs with a low carbon footprint would have an advantage so the tax would generate more lawyers, accountants, and bureaucrats at the same time as suppressing the productive workers who make stuff and what-not. Good if you want “less consumption” but bad if you like air-conditioning, heating, refrigerated food, clothes, cars and holidays.
It might eventually reduce the US reliance on foreign oil, but it would worsen the trade balance because goods would be more likely to be imported from countries without a carbon tax (thus importing oil instead in the form of energy in goods). Foreign factories would presumably have an advantage, and possibly a transport bonus too. Would carbon taxes apply to all ships entering US ports or just US registered boats?
In any case, isn’t the US in possession of bucketloads of shale gas, which is reducing the need for imported oil?
As it was in the beginning, is now, and ever shall be-
it’s all about the money.
Ken
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But just what is it about money, that makes your statement true?
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Politicians who advocate taxing energy should be [Snip. No suggestion of violence even if in jest] ED
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For God’s sake don’t suggest blowing them up [lets not] ED!
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How about this:
Politicians who advocate taxing energy should be “De-lighted”?
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Pity our lot have spent the windfall carbon tax in advance, while they also borrowed the bottom out of the loan bucket as well, so much so, that they have walked away from providing “carbon compensation” to the brown coal, briquette burning Victorian Power plants, and of course Victoria reeling from a 4 billion dollar cut in return of GST to that state won’t be able to even think of doing it by themselves, while saddled with wage claims, paying for white elephant desalination plants and other schemes dreamed up by Gillards Victorian labor mates.
Federal clown castle, the Wayne and Julia show!
Well every cloud might have a silver lining (30 pieces)!!
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Now perhaps you see why this REALLY is only about the money.
Let’s look specifically at the U.S. and here I can show you some accurate data, and keep in mind that this is just from the electrical power generation sector.
CO2 emissions just from that generation of electrical power come in at 2.53 Billion tons per year, and yes read that again.
2.53 Billion tons.
This is the CO2 emissions just from Coal fired power and Natural Gas fired power generation, and yes, I can be that accurate, and while some may think the figures sound too large to be true, I’ll show you how, and I’ll have the two links at the bottom of this Comment.
In the last rolling 12 Month period, the U.S. burned 849,697,000 tons of coal to generate the power provided from that sector. Each ton of coal then produces 2.86 tons of CO2, hence 2.43 Billion tons of CO2.
In the last rolling 12 Month period, the U.S. burned 8,980,261,000 mcf (mcf is thousand cubic feet) of Natural Gas to generate the power provided from that sector. Each mcf of NG produces 22 Pounds of CO2, and keep in mind here that in the U.S. they use short tons (2000 Pounds), hence just a tick under 100 Million tons of CO2.
So there’s your 2.53 Billion tons of CO2 emissions. Petroleum Coke and Petroleum based products add to that slightly, but that 2.53 Billion tons is the headline figure.
Now, just multiply that by the quoted Australian figure of $23 per Tonne, and the income from that comes in at close to $60 Billion ….. a year.
Keep in Mind that prior to his election (then Senator) Obama said categorically that he wanted it to start at $50 per ton, and that he couldn’t care if it rose as high as $500 per ton. You can do the Math on that one.
See now why any Government hungrily eyes any price on CO2 emissions. Keep in mind electrical power generation is (around) a third of all emissions.
Placing any cost on CO2 emissions has nothing whatsoever to do with lowering those emissions.
It’s just a huge generator of Government income.
It REALLY is only about the money.
Tony.
Links to both sets of data.
Coal Consumption In The Electrical Power Generation Sector (figure at bottom left and here expressed in Thousand Tons.
Natural Gas Consumption In The Electrical Power Generation Sector (figure at bottom left and here expressed in Million Cubic feet, converted to mcf by multiplying by 1000) Here, note the almost exponential rise in NG consumption over the last year.
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Bugger! ERROR ALERT
Funny, I posted this Comment, and then went off and had dinner, and it nagged away at me why the figures for NG were so damned low, and I’ve actually made this error a couple of times before, and then it hit me.
NG produces 122 pounds of CO2 per mcf burned, and not the 22 pounds I quoted.
So that makes the data for NG CO2 emissions come in at just under 550 Million tons, and the total CO2 emissions is now 2.98 Billion tons of CO2 emitted from the electrical power generation process for coal fired power plus Natural Gas fired power.
2.98 Billion tons of CO2.
So, at Australia’s $23 per ton, that comes in at $68.5 Billion per annum.
Sorry about that error.
Tony.
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There’s a very interesting aspect to trade that few are fully aware of; Free Trade Zones.
Refineries and manufacturing are frequently located in Free Trade Zones and the finished product produced, like gasoline, isn’t taxed until it’s sold into the market from the various ports of destination.
So, oil that’s refined in a US free trade zone and ultimately is sold in South America or another country can originate from anywhere in the world but, other than the minor duty on the imports, there isn’t any tax benefit to government unless the refined product is sold onto the open market.
Call me crazy but I doubt the Carbon Tax applies to manufacturing in Free Trade Zones as it would likely violate International trade agreements. Thus, Oil and Gas producers don’t care about the Carbon Tax because it simply doesn’t apply to them to any great extent.
It seems logical to assume that Free Trade Zones will expand and include power generation to avoid this absurd Carbon Tax and to ensure the cost of energy doesn’t undermine regional manufacturing?
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Border Tax Adjustments is the proposed mechanism to address this.
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To understand where those MIT folks are coming from, I suggest that you look at the stats and policy documents on their website
http://globalchange.mit.edu
In particular, look at their 2012 Climate report, and their “climate wheel” showing their estimated probability of warming. It appears that in a business-as-usual scenario we can only choose between catastrophic (3 C increase) and even more catastrophic (> 7 C increase). But if we let those very clever MIT folks in charge of the economy, we can be saved, because they have a very complex computer model that can predict the climate as well as the economic costs and benefits of the various options, and so are competent enough to decide for us. That’s their message in a nutshell.
Then look at who is funding those very clever MIT folks:
http://globalchange.mit.edu/sponsors/all
Alstom Power (USA)
American Electric Power (USA)
BP (UK)
Cargill (USA)
Caterpillar (USA)
Centro Mario Molina (Mexico)
Chevron (USA)
CONCAWE & EUROPIA (EU)
ConocoPhillips (USA)
CLP Holdings (Hong Kong)
Deutsche Asset Management (USA)
Dow Chemical (USA)
Duke Energy (USA)
Electric Power Research Institute (USA)
Electricité de France (France)
Eni (Italy)
Exelon (USA)
Exxon Mobil (USA)
GDF SUEZ (France/Belgium)
J-Power (Japan)
Lockheed Martin (USA)
Marathon Oil (USA)
Murphy Oil (USA)
Norwegian Ministry of Petroleum and Energy (Norway)
Repsol (Spain)
Rio Tinto (UK/Australia)
RWE Power (Germany)
Shell International Petroleum (Netherlands/UK)
Southern Company (USA)
Statoil (Norway)
Suncor Energy (Canada)
Tokyo Electric Power Company (Japan)
Total (France)
Toyota Motor North America (USA)
Vetlesen Foundation (USA)
in addition to pretty much every US Government department.
So, there you have it: on one side, the clever scientists who feel they should be in charge of the economy, of society and of our way of life because they know how to plan them in the most rational way (the age-old dream of ivory-tower academics from Plato to Marx). Next to them, pretty much every Big Oil/Big Coal/Big Car company, happy to receive government subsidies for the noble goal of developing renewable sources….and they need lots of subsidies, and now, because it’s a matter of life-or-death. Remind me again which side of the debate is funded by Big Oil, please?
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Robbo says…
Shhhhhh…. The co-option of the Environmental Movement, Academia, Media & Government by Fascist, Rent-Seeking, Crony Capitalism is supposed to be a secret.
(Whoops – someone will likely now call me a conspiracy theorist nutter…)
But what can I say – what does anyone expect when you create a multi-trillion dollar
Emissions Trading Schemehoneypot, forCO2 Emissionsa tightly coupled, inelastic proxy for human energy use, except to attracthigh-minded community orientated peoplepsychopaths.00
The only problem for the polis. is that they way all the US Govt. departments hand out grants to Mann and co. they would at least half the $1.5 trillion over the 10 years to keep up the gravy train.
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Greek PM says it at last: carbon taxes are just another way to raise revenue
Some are more brazen;
Some might be interested in this link from canadafreepress:
It’s great that the Republican Party has officially taken a stand against the United Nations and its global communist agenda
‘Agenda 21’ and Why is the GOP Now Opposed to It?
Of particular interest for some, this UN initative:
ICLEI (International Council for Local Environmental Initiatives)
“an international association of local governments as well as national and regional local government organizations who have made a commitment to sustainable development.” Check here to see if your town, city or county is a member
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The United Nations first came up with the carbon scam. They wanted everyone to trade carbon credits. The UN gets to print the credits and they of course keep a large percentage of the money. Then governments realized that by implementing carbon taxes as opposed to carbon credits, they would get to keep the money, rather than it going to the UN.
Which is why Australia will never switch from a carbon tax to international carbon credits in 2015. That was just a sop to the Greens, who are one world government believers (ie a world governed by the United Nations – god forbid).
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Whether a green energy scheme, a carbon tax or a carbon price at any rate, it’s never economically viable to change to a power source that costs more, in energy terms, than it generates. Yet that is what Australia effectively has been doing both with windpower and photovoltaics.
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Love all these comments. Everyone is really getting it now. By the way it is not a conspiracy theory if you can find open declarations of intent. In most cases this is just a classic case of government rent seeking due to the government wanting to control the economy and pick the winners and losers.
My thanks especially to Robbo for that MIT link that sure does put the systems theory and organizational learning work MIT lecturers Peter Senge and Otto Scharmer are doing with big corporations operating globally and educators worldwide into perspective. Targeting the human Blind Spot that motivates behavior unconsciously via education and corporate workshops really will make that IGSM model more predictable regardless of the weather and temps and climate.
But then I have been writing for a while that climate science and its models are not designed to predict natural science. They are designed to influence human behavior as a social science.
That leads me to my one dispute. IT is not JUST about power and money. The carbon tax influences and controls human behavior AND it gives control over production and consumption components of the economy. Remember the only problem these international statists and their cronies had with Communism was it did not produce enough revenue for them to live well from and the citizens to have a minimum. What the intl lit now calls the Line of Plenty. About $70,000. So these are all schemes to control people and the economy without losing the revenue capitalism produces. They also erroneously believe the economy is a fixed pie that can be redistributed without affecting its size. Wrong.
They also have to attack the noetic system, human consciousness, to get the desired control and power and that’s where my work comes in. http://www.invisibleserfscollar.com/oh-good-grief-now-i-need-to-know-what-a-noetic-system-is-because-it-is-under-attack/ is where I explained how this worked if you were trying to go after all the human social systems like a Marxian without saying so. I found the blueprint I described from a Dutch 1961 publisher but it’s an American author. The book gets referred to by schemers all over the world. Or used to until I wrote about it.
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Surprise, surprise! The Gillard government announces that the promised buy back and closure of Australia’s’ five biggest brown coal power generators will no longer proceed. Well if you were a big spending, big bureaucracy style government in particular, or any style of government looking for new revenue streams for that matter, wouldn’t you have a potential vested interest in allowing the dirty generators to operate? Why would you pay (a billion dollars?) to reduce the reliability of the electricity supply to a nation, close large workplaces, put people out of work, alienate communities, and eliminate a massive revenue stream into the bargain, unless of course you were doing so to address the “greatest moral challenge of our time”.
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NEWS ALERT, NEWS ALERT, NEWS ALERT:
Labor can’t be trusted.
Christine Milne
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mc,
the ‘failure to purchase’ those named coal fired power plants has nothing to do with their asking too much money that the Government was not prepared to spend in purchasing them and closing them.
THAT is just an excuse, and notice how quickly Swan backed him up.
These plants are, (and note the ages, as all are reaching their use by dates) Playford in S.A, (49 years old) Collinsville in Nth Qld, (36 years old) Energy Brix in Victoria, (56 years old) Yallourn W (40+ years old) and Hazelwood. (oldest unit 47 years old)
Even approaching their 50 year life span, these plants have life in them yet. Because of their age, that means they have less time still to operate, so that makes them the cheapest to buy out, as their contract to supply is shorter, hence less money to buy that contract out.
However, as the Labor Government is taking the razor to spending in some areas, to pay for their new raft(s) of big budget promises, then this purchase is an outlay that really could be put off into the future, as, because of their age, then natural attrition will see them close anyway. So, Labor saves money in not buying them out.
However, by far the most worrying prospect here, (for the Labor Government)is not the flak they may draw for other areas, but the income they will be foregoing if they do shut them down.
Because of their Carbon Tax (sic) the income from these 5 plants will amount to (around) $500+ Million.
Do you seriously think that the government will take that hit, which in effect, is a double whammy. Money Outgoing to buy the plants, and loss of income by closing them down.
No, they need that huge amount of income, so it’s easier to blame those
filthy dirty money grubbingpower plant operators for asking too much money.Note how they told you hand on heart that the introduction of this huge new tax would lower emissions.
Note now how hungrily they look at that income from these plants, so, in effect, the real intent of the new Tax is to keep those plants going for as long as is feasibly possible.
That Green whine you hear is just banana skins in their gearbox. When those skins decay away, and the real truth becomes evident, that gearbox will just seize up solid.
Tony.
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TonyfromOz
agreed tony. no i don’t think the government would take that hit and may never have intended to. as you say, they make these declarations to us with hand on heart and i would add, while licking their lips with forked tongues. there is something misanthropic, defeatist and unimaginative about the sustainability movement, it betrays a lack of belief in human creativity. if we were genuinely progressing as a society our creative ingenuity would be leading to cheaper rather than more expensive power. as for cleaner power, we would already have it in the form of nuclear fission, if only we could snap out of our Don Quixote delusion that it is a monster to be slain. your image of the gearbox seizing up solid is spot on, though it gives me the fear i gotta tell ya.
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correction above, billions plural.
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SO TRUE!
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The biggest problems were productivity – the workers had no incentive to produce more than the minimum requirement; and quality – there was no incentive to do the job right.
The only way workers could better themselves was by joining the Party, playing the political game well, and gaining advancement by supporting the right people in the political infighting.
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Jo
One problem with your post. The carbon tax would not raise $1,500,000,000,000. It would merely relocate it from the pockets of the mug voter to wherever the US government decided to “allocate” it. Will a government spend this money more carefully or wisely than the people who have actually earnt it? I don’t think so either.
Charging for carbon dioxide generation does not generate anything of intrinsic value – the net sum of the equation is negative value, aka waste. As seen in just about every so-called green scheme that’s been foist upon us to date.
Cheers,
Speedy
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Reality check!!!
At present, the US does NOT subscribe to Cap and Trade. The closest Congress as gotten was a recent attempt by Kerry to sneak Cap and Trade into the Law of the Sea treaty which failed. The only State in the USA that has been stupid enough to implement a Carbon Tax scheme is California and its doomed to fail thanks to the dolts on the California Air Resources Board (CARB) and the fact that a US State can’t independantly enter into foreign trade agreements which require Federal legislation. In other words, the idea that California will be trading credits with Canada and Mexico is DOA.
Congress has recently cut subsidies to the wind industry. They logically concluded that there isn’t any need to subsidize a mature industry so wind now needs to compete in the market and is basically dead.
The majority of California voters do not support CARB’s Cap and Trade Scheme or any Carbon Tax scheme and 2/3rds of voters agree that California is on the wrong track. So, no matter how much money US government thinks it can steal from taxpayers, it will never happen because voters will send them packing.
BTW, several States are in the process of enacting legislation to eliminate all UN programs including ICLEI and California has already eliminated Redevelopment Corporations by law.
The US has awakened to the not so Smart programs and is in the process of eliminating them or redefining them to be in the interest of US State taxpayers and not some cookie cutter UN program that achieves nothing.
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I’m pretty sure that if a Government has a large surplus, and they want to get re-elected (which is their job), they’ll probably drop income taxes.
In fact, if you don’t want to dampen the economy, which is also important for getting re-elected, you should keep the total tax the same or less.
This article seems to be comment from some other planet.
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Earth to Seth. Earth to Seth. Come in Seth.
Please check your location. Are you familiar with Australia and current events? Do any of the following ring any bells for you?
? Home insulation scheme.
? Cash for clunkers (Australia).
? GFC stimulus.
? BER?
? Malaysia Solution.
? Tim Flannery.
? Deficit spending.
? Carbon Tax.
? Mining Tax.
? Flood Levy.
Noticed any drop in your income tax lately? Me either.
Cheers,
Speedy.
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Hello Seth, Costello continually lowered income tax, company tax and abolished the 15% superannuation departure tax and promptly got voted out of office for a party that has NEVER reduced taxes but is great at making promises.
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When you de-industrialize, you create a service economy.
If you stop creating things, all you can do is use things until they break. Then you philosophize and drink greenhouse (with CO2 help) grown organic coffee. Caffeine helps with philosophizing as you get excited but need to stay near bathrooms so you don’t actually do things that might not work out as green as you expected. You downsize your expectations and live in your parents’ house, ’cause it’s already paid for.
Isn’t that what Greece does?
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“But with the carbon tax there are virtually no serious tradeoffs. Our analysis shows the overall economy improves, taxes are lower and pollution emissions are reduced.”
Makes you wonder if they still believe in the Tooth Fairy.
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We here in New Zealand say “Giddy-up” when nudging our nag into a faster gait. I wonder if “Giddly-Up” evolved for Australians after long sessions at the Ettamogah Pub?
🙂
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The term “Giddy-up” also has some very rude connotations in some parts of Asia. But I think Jo was actually mimicing something Gillard said. I find it hard to keep up.
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It’s a bit of a concern that you know the Asian connotations of “Giddy-up” RW. Although I used to be fluent in Japanese and visited that country quite a few times, I never came across “Giddy-up” there. Perhaps I frequented the wrong Asian country? 🙂
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Damn the politicians! Vote for Romney! Whatever else he may be, he knows better than to raise taxes willy-nilly.
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A carbon tax is a GWD A government wet dream. Problem is GWD’s tend to be full of UFC’s [unforseen circumstances] leading to PPO [people p2ssed off] when this occurs it is some what like a boomerang, it comes back to those having a wet dream problem. It becomes their problem as the people turn to KIA [ not the car ] kick in @rse, This is occurring as we speak, power bills are coming, in people are PO, and the government is back tracking.
Tax receipts falling and the government waking up that their wet dream was a nightmare. Idiots.
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[…] Jo Nova Share this:PrintEmailMoreStumbleUponTwitterFacebookDiggRedditLike this:LikeBe the first to like this. This entry was posted in Cap & Tax, Climate Change and tagged carbon scam, carbon tax, climate fraud, climate hysteria, government cash grab, hot air scam, weather superstition. Bookmark the permalink. ← Mary Kay Barton: U.S. Public Interest Groups Fighting Windpower […]
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Ah. But what would be the compliance cost?
There is an interesting paper released yesterday about compliance costs http://kansascityfed.org/publicat/sympos/2012/ah.pdf?sm=jh083112-3 . It applies to the cost of financial regulation, but it has interesting implications for the cost of regulating the climate.
My comment:
Just imagine what the regulatory burden of carbon tax or ETS would become on industry and business if carbon pricing is implemented. According to EPA, its costs alone would be $21 billion per year to administer just the current laws, let alone what they would have to grow to if the assumptions underpinning the carbon price economic modelling were to be implemented. And that is just the EPA’s share. What would be the cost to business. One estimate (I think it is EPA’s) is that there would be 10,000 businesses affected by the current laws. But the cost to business with measuring and reporting emissions would be much higher that to the EPA which just has to look after the data and take business to court that get it wrong somewhere along the line. Does that mean the cost to business would be $210 trillion per year (for the current laws if they were applied)? How many would be effected eventually when all emissions from all sources must be included and what would be the compliance cost for each business?
“The ultimate compliance cost of the ETS
http://www.onlineopinion.com.au/view.asp?article=13578
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Peter, the bureaucrats would say this (forced) money flow is good for the economy.
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You should all check out the carbon tax revenue filling Eildon Reservoir in Victoria, although it began filling again 3 years before the tax began..
I hadn’t seen it at that level since the mid ’70’s as a child. I’m hoping another round of AlcoPops tax can do the same for my pool 🙂
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1) Taxes should be imposed for a valid reason and the funds used for a valid related purpose, not just to balance a budget. The nonexistent effects of CO2 on climate just do not qualify. Generating a new revenue stream just because you are spending too much already is like giving a huge dessert as a reward to an obese child because he/she could not eat any more at lunch.
2) Lower corporate and business taxes because of the new (falsely-based) revenue stream is stupid. Such a carbon tax raises the cost of everything, the cost of living for everybody, and thus hurts the poor and low income the most. How is that fair?
3) There are serious “tradeoffs” to a carbon tax. Basing a government’s funding on a false basis simply would eventually fail as there is a disconnect between the real world and the income. Bureaucracy/government will find a way to make the taxes even more productive using more false and fake reasoning.
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The Carbon Tax scheme is also accepted by some who would like to see our U.S. Tax Code shifted from income (a necessity) and toward consumption (ideal, as it is by choice). They normally take no stance with regards to (C)AGW. A Carbon Tax would be considered revenue-neutral in their paradigm via a straight swap. I don’t believe them to be under any delusions of which there will be those whom attempt to simply annex another revenue stream. The most highly known supporter would be Art Laffer.
I see some calculations on output, but I’m highly ‘skeptical’ that it would not become arbitrary almost from the outset. I’m also amused how all tabulations from our federal government have a 10-year timeframe…bigger is better? $150bil not big enough? It’s cool though, we’ll just continue to ruin the world’s currency that no taxation could repair…oops cat —> bag –> out of
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[…] Carbon Tax could raise $1.5 Trillion for the US government. No wonder politicians drool over dire pr… […]
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