Here it comes–a carbon tax

Obama May Levy Carbon Tax to Cut the U.S. Deficit, HSBC Says

By Mathew Carr – Bloomberg News

Barack Obama may consider introducing a tax on carbon emissions to help cut the U.S. budget deficit after winning a second term as president, according to HSBC Holdings Plc.

A carbon tax starting at $20 a ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021, Nick Robins, an analyst at the bank in London, said today in an e-mailed research note, citing Congressional Research Service estimates.

“Applied to the Congressional Budget Office’s 2012 baseline, this would halve the fiscal deficit by 2022,” Robins said.

h/t to WUWT reader “dp”

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and that money will be going in whose pocket?

Jimmy Haigh

It still won’t make much of a dent in $16 trillion (and rising).

Titan 28

Idiot! A tax isn’t going to cut the deficit. It’s simply another cost of doing business, which is passed along to consumers in the form of higher prices and bills. Consumers then spend less on other items. It’s a push pull world. Worse, a carbon tax will make EVERYTHING more expensive, not simply electricity, but every single thing we eat and purchase.

Oh, that’ll help. If he does this he further proves he the intelligence concerning economic policy of a slug.

Deb Scott says:
November 7, 2012 at 8:27 am
and that money will be going in whose pocket?

Uh, worse – whose pockets will it come out of?

Robinson

I’m not all that good at Math, but how does $154bn halve a fiscal deficit of over a $1,000bn a year by the year 2020?

Mark D.

He would have to get it through a Republican House unless he could find a regulatory way to do it with the EPA (if I were a betting man….)

Robinson

…and besides, he won’t get it through either congress or the senate.

beesaman

and so it starts…..

sean2829

Can you spell R-E-G-R-E-S-S-I-V-E.

Nerd

154 billions a year? Still, that’s not enough to overcome spending deficit unless we completely gutted military budget… which is Obama’s goal anyway.

Ron Clutz

Deutsche Bank shut down their emissions trading group. Looks like HSBC is trying to keep theirs going. Good luck with that.

H.R.

Yesterday I voted for change and hoped nothing like this was going to happen. That didn’t work out very well.

Kurt in Switzerland

Doesn’t have a prayer to get through the Republican-controlled House or Representatives.
Dead on Arrival.
Obama’s angle is to penalize energy intensive companies through the EPA, by declaring CO2 to be a pollutant. But such action would be challenged in the courts.
Four more years of gridlock.
Kurt in Switzerland

ShrNfr

The availability of cheap energy is one of the primary movers of any economy. Make it expensive and the economy will not move, it is really about all that simple. Perhaps it is time to get busy with the thorium reactors.

Toby Nixon

Obama cannot “levy” anything. He can propose it. It will be DOA in the House.

Richard111

Brilliant! Destroy the economy to reduce the deficit!

Gary

“A carbon tax starting at $20 a ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021” … until it hammers the economy by way more than $154 billion by 2021.
Static economic analysis should be illegal.

When people pay more in one part of the economy, they spend less in another. All this will do is reduce tax revenues from other sources while adding an extra bureaucracy.
At least the carbon tax I pay in B.C. Is revenue neutral and did not raise taxes overall.

TheImpaler

Taxing poor people’s energy! Balance the budget on the backs of the poor, truly progressive. Like any of that money would be used to reduce the deficit anyway, just more money for our marxist dictator to kick back to his green energy cronies.

[snip – flame bait]

markx

All these p****s who thought they were saving the world are going to get a real wake up right about now.
In the end it is all about getting an extra dollar out of everyone.
Wonder how long it will take them to realize they have been played?

Taxes are only introduced to provide for the maintenance of increased debt. At current ratios, the expected revenue from a carbon tax will support?/?justify ~$2 trillion of additional near term debt. The current accounting cost structures for the existing state of our economic system, however, will not allow $2trillion of new debt to be wealth productive because commerce and cost inflation are now intrinsically motivated by the heavy borrowing costs required for personal and enterprise consumption. …The federal Water Mill of tax revenue and government services has become so onerous that it seriously infringes upon the ability of state and local government water mills to manage efficient cash flow/ wealth production.

And spending the money to reduce the deficit is going to benefit the environment and combat climate change how?

Lets certainly hope we get a carbon fee (or tax) ASAP. With nuclear power, waste disposal is a significant portion of the total cost. Similarly with fossil fuel based power, the cost of CO2 waste disposal into the atmoshere should also be included and then let the free market system do the rest.
This, of course, explains why the Fossil Fuel industries deny the science behind AGW. If they did admit that our increased CO2 levels are contributing to global warming, they would have no argument against this “waste disposal” cost. Thus they do their best to try to fool and confuse the public on this issue for as long as they can. In the meantime they make tons of money with BAU.
Now that our President has another and his last term, I hope he has the courage to do all of the right things wrt AGW. The going will still be very difficult, however, because the scientifically illiterate forces of our country seem to include a major portion of Corporate American whose major interests always seem to be squewed towards the short term benefit of shareholders. Up to now, those forces have controlled our elected officials in Washington. With Omama’s reelection and with the addition of Elizabeth Warren to the Senate, lets hope that things are finally about to change big time wrt the AGW problem. Who knows – one might even dare to hope that the likes of Andrew Watts might also eventually see the obvious science associated the AGW problem and begin to be part of the solution.

Jerry

Revenue bills originate in the House which is controlled by the Republicans. Carbon tax won’t happen.

John

The US is in a very precarious financial condition. Yes, we will have to raise money. A carbon tax is better for the US that any other carbon policy, such as cap and trade. Wall St. really wanted cap and trade because they would be able to write all sorts of financial instruments on carbon, derivatives and whatnot. Another chance to fleece the rubes. If the carbon policy of the US is a tax, it will make it a lot harder to have cap and trade in some future presidency.
I don’t like to get taxed, I don’t like my energy prices to be higher.
But the fiscal cliff is a reality. We have to deal with it. I’d rather have a carbon tax as part of dealing with the fiscal cliff — even though I don’t buy the BS from Michael Mann and the other purveyors of histrionics about the immediacy of huge harm from warming — as part of a deal to get us off the fiscal cliff, if it means we can bury cap and trade.

MrE

But carbon tax only affects the richest 1% right? LOL

ossqss

Welcome to the United States of Greece.
Big quake just occurred.
http://earthquake.usgs.gov/earthquakes/recenteqsww/

Edohiguma

Problem is, those $154 billion by 2021… are completely irrelevant. US Treasury just came out expecting the $20 trillion debt to hit by the end of this year. And that’s just for this year. Then Obama will undoubtedly raise the level again and eventually, well, we all know how that will end.
More taxes lead only to one thing: more spending. I mean, Austria, for example, has the highest tax income ever these days and what is happening? Our national debt is rising like crazy. Why? Because even with our high taxes our so called leaders spend money they don’t have. The more taxes you have, the more freely politicians spend.

First, you bribe voters with public money. Then, you bankrupt the country. Then, you increase taxes for working class to pay the debt, so you can continue to bribe voters by other people’s money.
Sounds like positive feedback.

Josualdo

There it is. No deficit and no warming planet equals Carbon tax. You could see it coming.

Robert of Ottawa

It will just be spent on more wasteful programs and shuffled off into regime chums pockets

Jeff L

The irony of course is that a carbon tax would be very regressive, hitting those who can least afford it the hardest. So much for the dems caring for the little guy. Using weather as an excuse to tax the public , how pathetic! Looks like WUWT will have its hands full for the next 4 years trying to educate the public about what’s really going on in weather & climate.
Keep fighting the good fight ! That’s all that can be done.

pat

Right after reassuring the voters of Ohio they need not worry about their fledgling energy industry and revived heavy metal manufacturing.

Andrew30

Once the number of voters that derive all or part of their income from taxation outnumber the number of voters that are the subject of taxation the destination is inevitable.
People that derive income from taxation and return some of that taxation derived income to the government in fact pay no tax; they simply return an amount that will be given to them next year.
Socialism requires, and seeks to create, people that are dependant on income from taxation. It took 10 Trillion dollars to create the necessary dependants, the die is cast.
The United States will follow California on their voyage to the Mediterranean coast.
When will John Galt stand up?

All revenue (tax) measures must originate in the House. Obama cannot get a tax increase bill passed.

Steve Divine

Applied to the baseline… as in IF DC doesn’t continue to spend like a shopaholic watching the “Buy Everything” cable channel at 3 in the morning (leave sailors out of this). That’s gonna happen. Hey, I’ll give you a good price on….

MarkW

ericgrimsrud says:
November 7, 2012 at 8:51 am
CO2 in the atmosphere is a benefit, not a harm. We should be subsidizing the introduction of more CO2, not penalizing it.

With, well, perhaps 2 or 3 thousand such taxes, the deficit might be affected. Somewhat.

Fred

Looks like the 47% have figured out how to keep the free stuff rolling in. But sooner or later America will run out of other people’s money to spend. Because it is always so.
California is the next Italy.
New York is the next Spain.
And Washington D.C.is Athens on the Potomac.

MarkW

John says:
November 7, 2012 at 8:53 am
Yes we do need to decrease the deficit. However the history of tax increases is that they NEVER decrease deficits. The reason for this is two fold.
First new taxes slow the economy, meaning revenues from other taxes go down, at least partially offseting the money colleced by the new tax.
Second, new money is always spent.
As a result, every single time taxes have been raised, the deficit has gotten worse, not better.
Besides, we are already over taxed.

RockyRoad

When a lazy electorate is given the choice of hard work and Santa Clause, which will children choose?
Yup.
And a carbon tax is just another trick out of the big red bag.
(Romney had 2.5 million fewer votes than McCain. Apparently we’re not teaching work ethics anymore.)

Tom in Florida

John says:
November 7, 2012 at 8:53 am
“But the fiscal cliff is a reality. We have to deal with it. I’d rather have a carbon tax as part of dealing with the fiscal cliff — even though I don’t buy the BS from Michael Mann and the other purveyors of histrionics about the immediacy of huge harm from warming — as part of a deal to get us off the fiscal cliff, if it means we can bury cap and trade.”
John,
Like a person who lives in perpetual debt, the government is comfortable with current annual deficits of over $ 1 trillion. I say this because for the past 3 years we have had annual budget deficits of that amount. If they weren’t comfortable with it something would have changed. So how can you expect an additional flow of income into the federal government to be applied to a deficit they are so comfortable with? No, they will simply spend it and the annual deficits will remain the same or go up and the national debt will continue to rise until you will need a wheelbarrow of dollars to buy a beer. And it will be an import because all domestic companies will have been taxed out of business.

David Larsen

So our manufacturing base becomes less competitive in the world market and China eats more of our lunch. Let’s make everything union also and make them pay part of that to treasury also. The state of Illinois has the highest debt to resident level of $ 7,200 per man, woman and child. California is second with $ 3,600 per man, woman and child. Any correlation yet? We need more government and less business.

OooooH! Wow!!!
154 billion!!!
Half-a-month’s worth of Fed spending.

Kev-in-Uk

So – the truth is out – use a Carbon tax to raise revenue! – you poor folks in the USA will end up like the Aussies. No doubt we will be next……..(insert the worst expletives you can think of, and thats what should be appearing here to describe what I think of these bar stewards!)

Jim Clarke

The budget deficit for the last 4 years has been over a trillion dollars. Now we will add full blown Obama Care, while the social security debt balloons and the percentage of the population on some form of the dole grows larger every year. Yet, this article indicates that the budget deficit will be around 300 billion dollars in 2012, more than a 70% reduction from this year!
In a pigs eye!
A carbon tax will just make it harder for everyone to make a living, especially the poor, who pay a greater percentage of their income on energy than the more well-to-do.
A carbon tax is like a new ‘sin’ tax. Tobacco and alcohol are heavily taxed because there use is considered bad and, therefore, easy to the populace to agree on higher taxes. Now carbon has been sufficiently demonized that the administration may feel they can get a ‘sin’ tax applied to it. The difference, however, between carbon based energy and tobacco and alcohol is obvious: the latter are harmful to you health, while carbon based energy is the life blood of our economy and the only thing that keeps us from returning to a pre-industrial life style.
If I where trying to covertly destroy the United States of America, I would be all for a carbon tax.

Jeff in Calgary

markx says:
“…
Wonder how long it will take them to realize they have been played?”
You obviously have not read Atlas Shrugged. They never do learn. They continue to blame the ‘greedy industrialist”

Bob Rogers

In the real world, new taxes on businesses are not on the table, no matter what some bank in London thinks.