The Corner

Economy & Business

Against a Carbon Tax

John Sweeeney argues on the homepage today for the U.S. to adopt a revenue-neutral carbon tax as part of a strategy of moving the world toward carbon taxes.

I find this alternative strategy for dealing with the risks of climate change superior. Note the estimate that “an optimally designed and implemented global carbon tax would provide an expected net benefit of about 0.2% of the present value of global GDP over the next several centuries.” As authors Jim Manzi and Pete Wehner note, that’s “a lot of money,” but given the many ways a real-world regime of global taxes would fall short of optimality it is not a strong reason to go down this road.

I am also skeptical that a carbon tax “could be designed to be revenue-neutral and thus not result in an expansion of government,” as Sweeney writes. Let’s say we reduced payroll or income taxes dollar-for-dollar to account for the new carbon tax. Over the long run, revenue-neutrality seems unlikely to hold because it is easier to raise a tax that already exists than to create one that doesn’t. If you really wanted long-run revenue neutrality, you’d need, I think, to extinguish a comparably large revenue source altogether as part of the deal for creating a carbon tax.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

Most Popular

Politics & Policy

Pelosi’s House of Pain

Not so long ago — as recently as the cover of the March 2019 Rolling Stone, in fact — they seemed like the best of friends. I'm referring to Nancy Pelosi and the members of "The Squad": Ilhan Omar, Alexandria Ocasio-Cortez, and (not pictured) Rashida Tlaib and Ayanna Pressley. They shared some good ... Read More
Education

Gender Dissenter Gets Fired

Allan M. Josephson is a distinguished psychiatrist who, since 2003, has transformed the division of child and adolescent psychiatry and psychology at the University of Louisville from a struggling department to a nationally acclaimed program. In the fall of 2017 he appeared on a panel at the Heritage Foundation ... Read More
Film & TV

How Seinfeld Mastered the Comedy Domain

I can’t say whether Larry Charles, Larry David, Alec Berg, Spike Feresten, and the rest of the brilliant writers of Seinfeld were students of F. Scott Fitzgerald, but they might as well have been. Fitzgerald supplied the best advice for sitcom writers: Start with an individual, and before you know it you find ... Read More