> 1. Poorer people tend to drive older vehicles, so if you solely encourage higher fuel economies by taxing carbon emissions, then the tax is (at least short-term) regressive.
You give it back to poor as a income-phased out refundable tax credit. Crucially, base it not on how much they drive or consume, but on their income.
Name it something like the "Worker's Energy Credit". In the worst case, it cancels out the carbon tax spent by them commensurate with their lower income.
In the best case poor people who don't drive much actually come out ahead, and it's just a very progressive sales tax.
The rich might hate it, and call it "redistribution", which is fine because that's exactly what it is, and what taxes have always been, but this one would redistribute downwards instead of upwards, and incentivize lower carbon emissions by those who can afford it.
This is way too complicated. You just give it to everyone unconditionally and tax it as income. We already have progressive graduated income taxes with a huge exempt class, we don't need to layer anything on top of that.
Why don't the poor just buy smaller cars? Less weight - less pollution. Nobody needs a to drive a pickup, unless they run a farm or construction firm. A car weighing less than a ton would be perfectly enough for 99.9 % of drivers.
Giving it back based on being alive on Dec 31 seems the best solution to me. (It’s very difficult to game and if you give 900 billionaires under a million bucks in total, it’s just not that big a deal…)
We manage to phase out ACA subsidies at 400% of the federal poverty level, so I don't see why we couldn't use a similar mechanism for an energy tax credit.
You can. It will cost political capital and erode the clarity of the messaging about the purpose of the tax. It also gives politicians one more thing to dick around with later.
Personally, I think it’s letting the perfect be the enemy of the 99+% perfect.
> The rich might hate it, and call it "redistribution", which is fine because that's exactly what it is, and what taxes have always been, but this one would redistribute downwards instead of upwards, and incentivize lower carbon emissions by those who can afford it.
Larry Page would be pumped. His annual salary is $1.
I feel pretty strongly that adding exceptions and loopholes to taxes only benefit wealthy people, which is the opposite of the intent.
I would be interested in reading a study where all the tax laws in the country were burned down and rebuilt, with no loopholes or exceptions. Also, eliminate borrowing against a stock portfolio. That is downright evil.
> I feel pretty strongly that adding exceptions and loopholes to taxes only benefit wealthy people, which is the opposite of the intent.
It depends what the exception is.
If the exceptions are "we treat a form of income received disproportionately by the rich a 'not income' and tax it at a lower rate, and on top of that we add an extra tax on top of income tax on labor income, and cap the larger part of that extra tax, too, to avoid burdening high earners", that helps the rich, sure. But there are plenty of exceptions possible that don't do that.
> Larry Page would be pumped. His annual salary is $1.
The tax would be on consumption, the credit would be based on income, so Larry still pays when he buys gas (if not for his cars, then for his planes).
> I would be interested in reading a study where all the tax laws in the country were burned down and rebuilt
That would burn down the country. Tax policy and the economy are a ship that has to be gradually turned in the optimal direction, just like how for the last 40 years tax policy has been gradually redistributing growth/wealth upwards. Sudden changes (like we are seeing now with indiscriminate tariff policy) are what results in the most harm to the poor.
> Also, eliminate borrowing against a stock portfolio. That is downright evil.
Agreed, or just heavily tax borrowing against a portfolio above, say, $2M/year. That way you don't penalize working people borrowing against 401ks or taking home equity loans for home improvements.
> Larry Page would be pumped. His annual salary is $1.
Salary might be $1 but what is his effective income when he files his taxes? That is what he is taxed on, which includes things like dividends and selling of stocks.
There’s nothing wrong with borrowing against stock, the evil part is the step-up in cost basis when the billionaire dies that prevents them from paying any tax at all.
It would be a good deal for the country to let the billionaire use their skills to grow wealth without interrupting it and tax them all at death.