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”
erigrimsrud nicely exemplifies the problem.
At: ericgrimsrud says November 7, 2012 at 8:51 am
He pontificates about the ignorance of the masses regarding science. He has repeatedly jumped into threads on this site to comment on the science, and has wound up looking like a fool more often than not. Yet his belief that “his” science is right and anyone who disagrees is just stupid remains.
At: ericgrimsrud says November 7, 2012 at 9:40 am
He continues on to comment on issues of economics, and demonstrates that he understands even less about both economics and the practicality of the international carbon tax regime he proposes than he does about science.
This is the problem. I’ve changed my mind on certain aspects of agw science multiple times. When confronted with facts that don’t match my belief system, I question my belief system. Facts change nothing for ericgrumsrud, and the prevailing fact of the matter is that there are far more people on both sides of the debate that are committed to a given belief system (as is grimsrud) than there are those who, like me, evaluate and re-evaluate on a constant basis. Mo matter how many times grimsrud has been shown that his opinions on various aspects of science are wrong, sometimes comically and tragically wrong, his opinion on the science and what to do about it hasn’t wavered.
As an idealistic young man, I was of the belief that unlike religion, scientists formulated their opinions on facts and logic alone. As an older, wiser, more experienced observer of the human condition…. I have changed my belief system on that matter. I’d be happy to change it back, but ericgrimsrud continues to supply ample evidence that my current view is the correct one.
History shows that the US government should not look at carbon taxes as a source of revenue.
European governments implemented carbon taxes (Actually gas tax) decades ago. The populations changed over to smaller, more fuel efficient cars, more efficient ways of warming their homes, heating their water, etc. The result is Europeans have become more environmentally friendly (fuel efficient). But their governments have not generated much in the way of extra tax revenue.
the gov’t players know this from years of empirical testing and validated experience:
you are stupid, you can be lied to with impunity, you will continue to pay and continue to vote because you are the abused half of a codependent relationship who lacks courage and can’t say ‘no’. you were made to be abused.
yet you will tell yourself that things will change and carry on doing the same that got this result every single time you tried it. why learn from experience when you can wallow in the misery that makes your life meaningful?
john galt already did his thing. he just didn’t bother telling the cringing, huddled mass of weaklings.
ball’s in your court. among you there may be a pair. the wise money is against it.
suffer. you have earned it.
Tax bills have to originate in the house… but Obama may well use executive privilege (as he already has) to direct the EPA to levy massive fines that are effectively a tax. Don’t be surprised if this is the route that is taken. He has already demonstrated by four years of folly to have no respect for the channels of proper authority or the checks and balances instituted under the Constitution.
ericgrimsrud says:
November 7, 2012 at 9:40 am
“But in order to help the more needy among us, the revenue collected via that C tax would be returned to the public on a capita basis via our IRS. Thus, citizens could decide whether they wanted to spend their portion of the fee on the then more expensive gas and oil or pocket that money and seek other more efficient ways of living by which their carbon footprint would be reduced. All of this is called the Carbon Fee and 100% Dividend plan – look it up.”
Their portion of the fee?????? Why should they, ” the citizens”, even get a portion? It is not their money. Businesses are in the business of making profit, for the owners and other investors. That is the only reason for a business. If you think it is any other reason you probably never owned or invested in a business. The side benefit from that motivation is jobs, healthcare and other benefits that the business sees as a means to attract good, productive people in order to make more profit. Profitable businesses are good for everyone! Every penny the government takes away from a business damages the business and the economy.
“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”
yes, I suppose it COULD raise that much. It also COULD raise basically nothing and drive what’s left of the American manufacturing sector elsewhere.
but politicians generally think they can tax and regulate without those being taxed and regulated changing their behavior to avoid those taxes. It’s kind of insane to think this fragile economy could survive energy prices increasing.
Rather than using hard science to demolish the policy perspectives of ideological nut jobs, Rs relied upon familiar lines of reasoning that had long since had their foundations torn away by “what can I get for free? tides.”
At root, I believe those packaging the aired message did so because they were satisfied by the proportion of benefits allotted to them else they would have spared no effort to spotlight the most efficacious and quick opponent defining messenger….Bill Clinton’s son
I call B*llsh*t!
Obama is willing to print trillions of dollars (on recycled paper, no doubt) to fund his misbegotten ideas about the energy industry – (food-to-ethanol, biodiesel, wind, solar, tidal power, all-electric cars) – so why does he suddenly need to draw huge amounts of cash away from small businesses and taxpayers? At the Federal level it is NEVER about the money – it’s always about the power and control over people and what they do.
Cam_S says:
November 7, 2012 at 10:11 am
To socialists taxes aren’t just about making money but forcing people to do thing that they believe are correct. European “leaders” didn’t like it that the europeons could have nice stuff like the leaders and thus “adjusted” the tax base so people would be forced to buy smaller cars.
Funny thing is, China is getting it all right, without even thinking about a carbon tax.:
Building national transport infrastructure, highways, bridges, high speed trains, dozens of airports. Opening a new coal fired power plant every few weeks to replace all the millions of little old dirty coal furnaces polluting the country. Building massive hydro projects. Setting up nuclear power plants. Planting trees, rapidly modernizing their agriculture.
Funny thing is all of this will more efficiently use energy (minimizing CO2 and probably more importantly other outputs) for great gains in efficiency. And helping the economy at the same time.
He doesnt understand American govt, where a penny earned, is 2 pennies spent
There is no reason in the world that any new money brought into the US Treasury won’t be wasted faster than it can be brought in. Neither party has given me any confidence in this, but at the least the Tea-Party influenced Republicans seem to be making an effort — for now, at least.
Besides, this proposal is completely wrong if the objective is to increase tax revenues. The way to increase tax revenues is the grow the economy. Historic data shows that federal revenues hover around 18% of the GDP, no matter what the tax rate. Raise the marginal tax rate to 70%? Still only going to bring in about 18% of the GDP. This proposal won’t work any differently than any other tax in that regards.
The way to increase revenues is to grow the GDP. Grow jobs, grow incomes, increase investment opportunities. Grow the economy and tax revenues will increase. A new tax, or raising rates on existing taxes reduces growth, (average income), employment and investment. This has been shown time and time again, in this country and in others.
A carbon tax will result in more outsourcing and more layoffs. Revenues will stagnate and sure-as-shooting, somebody will propose more big government programs to subsidize favored businesses, industry and organized labor jobs. Everybody else will foot the bill and the deficit will just keep growing.
Reducing the deficit is easy. Grow government spending slower than the tax revenues grow. Reduce tax rates, reform the tax code, encourage investment and remove onerous regulations and the economy will grow faster and revenues will grow faster. Reform entitlements and work to actually reduce the size and scope of government and the deficit could be gone in a few years.
As I wrote, tonight, to a very good friend in the USA: “For MORE years?”
I was unaware that a President can levy a tax. What tremendous changes our nation is undergoing.
Soon perhaps we can do away with the House, and then the Senate. That will certainly increase the level of change, if not hope.
A carbon tax will not control the weather, will not go towards more energy efficiency except by coincidence, but will give the Chicago thugocracy a nice new way to siphon off money into even larger Solyandra-pal scams.
Frank K. says:
November 7, 2012 at 9:30 am
ericgrimsrud says:
November 7, 2012 at 8:51 am
See how easy it is force people to pay taxes for a non-existent problem? Ignorant/misinformed people like ericgrimrud are why the U.S. will be bankrupt in just a few short years. Prepare yourselves now, folks. Look how the stock market is reacting to the “good news” or Obama’s reelection…
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If I could figure out where to move to I would sell out my home and business ASAP retire and let Obamaland support me.
Does anyone know where Galt Gulch is?
ericgrimsrud;
No, the carbon tax must affect everyone so that the daily habits of everyone is changed? ANd this must includes all people in all countries, of course. And this can be accomplished via import duties on all goods for which a carbon tax was not paid in the country of origin. Thus all countries will have a carbon tax so that the fees thereby collected will stay in their countries.
>>>>>>>>>>>>>
Can you tell us how this will actually work eric? How will you get every importing country in the world to agree to this? Did it occur to you that by not doing this, many countries would gain a competitive advantage on the goods they export by not taxing the imported commodities that are consumed by their export industries?
Can you explain how importing countries will ensure that exporting countries are reporting accurately? Do you really think that countries like China, Bangladesh and so many others won’t report that they are collecting the carbon taxes to they won’t suffer duties when they actually aren’t? Do you suppose that in corrupt countries (of which there are quite a few on this planet) there won’t be deals made where governments place a carbon tax on manufacturing, but refund it to the factory owners behind the scenes disguised as something else entirely?
What will you do to control this? Will you send inspectors and accountants to every exporting country to examine that governments accounting books (like they’d let you, lol) and that of the exporting companies themselves to ensure that they are playing fairly? Or perhaps you are of the belief that you could set up something via the United Nations to control this? Perhaps the “Oil for Food” program would serve as a good model?
I’d like to know also how you would differentiate between manufacturers with completely different technology. For example, if two exporters both make shoes, but one does it with mechanization and the other with child labour, will you know which is which when they arrive at the border? Will you send inspectors to over seas plants in other countries to ensure that they are really using child labour in order to avoid carbon taxes? Will you count promoting child labour and slave labour in third world countries as a victory of some sort?
Do you even begin to understand the level of corruption that you would be promoting by putting such a regime in place? Do you understand that the unintended consequences would be to promote child labour and slave labour wages over mechanization? Do you have any idea what the consequences for food prices would be world wide and that the most deleterious effects would be on the world’s poor and disenfranchised?
You live in a dreamworld of your own devise ericgrimsrud. What is sad is that not one word that I have said in this comment will make it through that wall of ignorance you surround yourself with and call science.
“Obama May Levy Carbon Tax”
Not within his power. Congress levies taxes.
A carbon tax will be effective in cutting the deficit for exactly the same reason that it will be ineffective in cutting carbon levels – energy consumption is for consumers inelastic with respect to price. There is a test of this. Has the tripling of oil prices in recent years reduced the quantity of gasoline consumed by a significant amount? To extent that it has reduced consumption, has the US consumption fallen by a significantly greater amount than in Europe? The reason I ask this is that Europe has far higher taxes on gasoline compared with the US, so the US has seen a much higher percentage increase in the pump price than in Europe. As a result, the demand effect should be larger.
There is one area where a carbon tax will be effective in reducing US emissions. That is in the gas-consuming parts of the chemical sector. We know that because thousands of jobs have been created in the US due to shale gas halving prices, giving a distinct cost advantage. Remove the cost advantage, and the factories locate elsewhere.
ericgrimsrud: … the revenue collected via that C tax would be returned to the public on a capita basis via our IRS.
Hmm…. I thought you were going to use that revenue to halve the national deficit. You can argue it round or you can argue it flat, but you can’t very well argue it round and flat at the same time.
lurker, passing through laughing says:
November 7, 2012 at 10:35 am
“I was unaware that a President can levy a tax.”
I would wager he will most likely have the EPA require permits and other things that cost money in order to do business. This would be the easiest and fastest why to bypass congress. The GOP of course will have turn coats in the house who will help get this stuff through at a later time making the then issued orders seem at least on the surface legit though red tape.
Anyone who doesn’t think obama can run wild and pretty much do whatever he wants has been watching him for the last 4 years. He shut down oil drilling in the judge even after a judge ruled against him(twice I think).
I think I found Galt Gulch, it is a private city in Honduras.
Halve the deficit? LOL NO WAY
Barry has already spent this new revenue…..
He’ll le us know what on later.
OWN your economy, Obamacrats.
For erigrimsrud;
A lesson in unintended consequences.
Many years ago, the USA imposed import duties on trucks. At the time, there were taxes on fuel that trucks were exempt from. What happened as a consequence of these two tax regimes was an interesting lesson in what happens when artificial taxes are imposed in order to change the behaviour of manufacturers and consumers.
One of the Japanese auto manufacturers produced at the time a very small truck, a 1/4 ton as it was commonly called. They approached the US government with the argument that this wasn’t a “truck” per se, but more like a small commuter vehicle with a tiny cargo capacity. After much wrangling, the bits and pieces of the American government that over saw imports agreed, classified the vehicle as a car, not a truck, and so the Japanese auto company was able to bring hundreds of thousands of them in exempt from the truck import duty.
Once inside the country though, having been classed as “cars”, these vehicles were now subject to fuel taxes that trucks were exempt from. The auto company went to the bits and pieces of the US government that controlled this taxation, and demanded to know why their vehicles were subject to a fuel levy on cars when any darn fool could look at the things and see clearly that they were trucks. They won that argument too, gaining a competitive advantage over domestic producers and circumventing the change in behaviour that taxation of fuel was supposed to drive.
And that’s the behaviour of a car company that takes pride in their image world wide as an ethical company, that is from Japan, one of the closest allies that the USA has. Do you think ericgrimsrud, that the likes of Hugo Chavez or Robert Mugabe or Putin or Assad or…. a very long list… would be content to just go along with your carbon tax out of the goodness of their hearts?
A carbon tax – and just as Americans were beginning to celebrate the “homecoming” of American companies due to the cheapness of shale gas. You Yanks have been showing up us Europeans with your cheap energy, but don’t worry. It will soon become as expensive as ours, and the Greens will be the ones celebrating – celebrating the outsourcing of American industry once again.
Seems like you CAN have too much of a good thing.
davidmhoffer says:
November 7, 2012 at 10:11 am
erigrimsrud nicely exemplifies the problem.
At: ericgrimsrud says November 7, 2012 at 8:51 am
He pontificates about the ignorance of the masses regarding science. He has repeatedly jumped into threads on this site to comment on the science, and has wound up looking like a fool more often than not. Yet his belief that “his” science is right and anyone who disagrees is just stupid remains….
_________________________
He was Professor of Chemistry at Montana State University (He mentioned this when he first showed up at WUWT) and in MHO reflects the typical occupant of the Regulating Class that Dr David Evans talks about. That is “How the regulating class is using bogus claims about climate change to entrench and extend their economic privileges and political control.”
When the eaters of tax funds start to equal or exceeding in number the creators of wealth, a country is in deep doo-doo. That is where many Western countries are now when you add up all the various types with their hands in the pot. From Highbrow Professors, politicians and their croniesto the street hooker on welfare and food stamps they have one thing in common, a desire to skim as much moola as possible from other peoples pockets. Personally after several years of research prompted by WUWT I have more respect for the street hooker.