The Guardian: A $20+ Carbon Tax would Boost Economic Growth

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By Source, Fair use, Link

Guest essay by Eric Worrall

From the “lets tax our way to prosperity” school of economics; According to Guardian author Greg Jericho, although it might seem like a massive carbon tax would hammer the economic recovery from Covid-19, the stimulus effect of spending all the extra revenue which would be squeezed out of the world’s taxpayers would make the carbon tax a net benefit for the economy.

Acting on climate change can get us out of recession. There are no excuses left

Greg Jericho
Sun 18 Oct 2020 06.00 AEDT

October is generally not a good month for news on climate change.

But acting remains imperative and this week, in its latest world economic outlook, the IMF revealed that acting on climate change will actually help us deal with the recession.

Yes, a price on carbon.

The IMF proposes a price that starts at between US$6 and US$20 a ton of CO2 and reaches between US$40 and US$150 in 2050.

For reference, the last year of the carbon price here was $24.15.

The IMF estimates it will knock back annual GDP growth by a touch over 2% by the end of the decade. But here’s the thing, the IMF also suggests environmental measures that will boost economic growth.

Read more: https://www.theguardian.com/business/commentisfree/2020/oct/18/acting-climate-change-can-get-us-out-of-recession-there-are-no-excuses-left

The IMF report is available here. Just in case you think Guardian author Greg Jericho is exaggerating, page 89 of the report says “… A green fiscal stimulus would support global GDP and employment during the recovery from the COVID-19 crisis and lay the ground for higher carbon prices by boosting productivity in low-carbon sectors. …”.

According to figures published by the IMF, the USA provides 17.44% of the IMF’s available reserve, just under $83 billion.

111 thoughts on “The Guardian: A $20+ Carbon Tax would Boost Economic Growth

  1. There’s nothing to stop these drop-kicks from banding together and donating a portion of their salaries / wealth to the government for it to spend on their behalf, like they stole it 😉

    • I lived in Boston a number of years ago (shudder). Around 1990, the state of Massachusetts re-jiggered state tax rates, much to the disgust of (unelected) SJWs, claiming ordinary citizens were outraged & demanded higher rates. A 1st-class virtue-signaling kerfuffle ensued, and legislators exercised Solomonic wisdom by including two ways of calculating state tax due on Massachusetts tax forms:

      1) The state’s statutory income tax rate (we’re still talking Mass, so it was pretty high)

      2) An optional, voluntary rate schedule that the beloved SJWs had lobbied for and lost (a much higher rate)

      As I recall, only a couple thousand Massachusetts taxpayers used the SJW-approved higher rates in the first tax year. This number (and resulting extra taxes) dropped dramatically soon there after.

      During the tax kerfuffle, the population slowly became aware that 20-year-old SJW college students pay very little (if any) income tax, regardless of what tax rate they use.

  2. Put chains on athletes. That will enable them to perform better at some time in the future. Most likely when they are dreaming, exhausted and asleep, about what they might have accomplished unfettered.

    • Taxes NEVER have boosted Economic Growth. NEVER. Like printing money NEVER has stimulated an economy. Devaluing your currency is taxing your savings. Every day what you have at your bank or under your mattress buys less. That’s a form of Theft.
      Direct Taxation is even worse. It makes you a number and numbers have no rights and gives those in power the right to know EVERYTHING about you. Freedom and Direct Taxation cannot coexist.

    • The huge fallacy is that they want to bleed the economy with taxes, which will also raise the cost of everything as the tax cost will be passed on to the consumer. Then, they assume that they will stimulate the economy by spending this stolen money, of course, after taking out government handling fees (which are huge, including the whole new department to handle this revenue). Last, the government will chose were to spend the money and, by its nature, it will not be cost-effective and will be a huge friends-and-family program regarding where it goes. Government has never been good at picking winners as they only chose from those lobbying (donating) most loudly. Ultimately, it is the consumer who will be bled dry and they are the ones generating this wealth in the first place.

      Rather, they should leave the money in the hands of the people and let them spend it as they see fit, which is almost always in their best interest and not the perceived and mostly wrong government idea of what they need.

  3. Planned socialist economies always beat out free market capitalism. Why wouldn’t the government spend your money more wisely than you?

  4. I am glad that I am over sixty because each decade it becomes obvious that people are getting more and more stupid as life gets easier and easier. I can’t believe how much easier life is from when I was a kid. Our fridge was a bricked up hole underneath a laurel hedge and my mother did the washing in a copper and using a mangle. I would certainly like to put a few people through one of those these days.

  5. Close on the heels of the Perpetual Motion Machine comes the idea that owing to some crack in reality caused by Covid-19, we will be able to launch people into prosperity with a Tax on their life. This will show for the first time ever in history how you can make people wealthy by taking away their money/

  6. If more taxes are so good for the economy they should raise sales, property, amd income taxes to 100% for everybody. Let the government own everything. We do not need money or possessions. We can all wear uniforms, live in barracks, and just do what we are told. BIG BROTHER! BIG BROTHER!

      • But there is a BIG difference between Direct Taxation and Indirect Taxation. Direct Taxation makes you a number and numbers have no rights and gives those in power the right to know EVERYTHING about you. Freedom and Direct Taxation cannot coexist.
        Indirect taxes, like sales tax, should be more than enough to govern a country. If not, your government has become too big and too powerful.

        • For the US it is The Fair Tax. Look it up.

          Not long ago I googled fair tax pros and cons, the never listed not giving the government all of your personal financial information as a pro.

          • If government calls it The Fair Tax you know it’s unfair. Just like The Affordable Care Act or the Patriot Act or the future New Green Deal. They all mean just the opposite.

      • Why is it that communists always defend any increase in taxation by accusing others of wanting no government at all?

        • Mark,
          0% tax is as ridiculous as William’s suggestion of 100%. Nobody is seriously proposing either.

      • “Loydo October 19, 2020 at 1:01 am

        Poor people defending tax cuts for the rich, that is truly Orwellian.”

        You have clearly demonstrated that you have never been poor. You may have SEEN poverty, in your travels (How poor is that) but not experienced it first hand.

      • Loydo, rich people always pass tax rises on to the poor, by recovering the lost tax money through charging higher prices for whatever essential good or service they supply.

      • It is rich people that buy things and hire people that helps to keep the economy turning.

        Almost every progressive I talk to today think the rich keep their money in swimming pools in the basement so they can swim in it. It’s a worldview generated from Donald Duck cartoons featuring Scrooge McDuck. It’s just one more condemnation of the education establishment Rich people know that you can’t stash your money away because inflation soon eats it up!

        • Rich people get rich mostly because other people are willing to pay them for goods and services. Then they put their money in the bank. They actually have no money left, only an IOU from the bank in the form of a monthly statement.

          Banks can lend their deposits out about a ratio 10 times over before depositors get concerned about collecting their IOU. Government manipulates the actual ratio to maximize economic benefit.

          We are well over the point where taxes are an insignificant part of the economy. Politicians who want to tax the rich more are really saying they are taking 10 times as much money away from business and personal loans and damaging the economy by 10 times as much as the tax money they need for their assumed beneficial programs. It’s a story that plays well to voters who think rich people have a basement full of gold bars. But bottom line is that the “rich” really have no money, they have put it all back into the system on the assumption that their monthly bank statement is real dollars….

          It’s the best system anyone has ever come up with to keep people ambitious and trying to improve themselves and feel rewarded for their efforts. Sure it needs some controls to prevent greed and nastiness on the part of some over-zealous profiteers, but planned economies with planned money systems have a track record of actually causing the firing squad or starvation deaths of millions of their citizens.

      • Who’s proposed tax ‘cuts’ for the ‘rich’? More to the point, do you imagine that a carbon tax wouldn’t affect ‘poor’ people?

        • Where does the concept of a tax cut come from? They are adding a tax on and the ones that will be impacted is always going to be the poor because they have the cheapest and poorest of everything from homes and insulation to appliances.

        • DaveS asked “. . . do you imagine that a carbon tax wouldn’t affect ‘poor’ people.”

          Well, it depends on whether or not the tax is applied FAIRLY across the socioeconomic spectrum.

          Let’s start with this:
          “Every person emits the equivalent of approximately two tons of carbon dioxide a year from the time food is produced to when the human body excretes it, representing more than 20 percent of total yearly emissions.”—source: https://www.sciencedaily.com/releases/2010/11/101102131108.htm#:~:text=Every%20person%20emits%20the%20equivalent,percent%20of%20total%20yearly%20emissions.

          So, combine this with The Guardians’ Greg Jericho’s statement “The IMF proposes a price that starts at between US$6 and US$20 a ton of CO2 and reaches between US$40 and US$150 in 2050.”

          You then see that applied equitably across the globe, the IMF thinks ever person on earth should immediately pay—just for continuing to live—an average of US$12 to $40 per year in carbon tax, expanding to US$80 to $300 in carbon tax by 2050.

          Any idea on how many people in third world countries will be able to pay this annual carbon tax?

          And there are presently about 7.8 billion people on earth . . . so this is not chump change that the IMF is talking about . . . as the song goes, “Money, money, money, MONEEEEY!

      • Loydo: to increase taxes on the industrious creators of jobs, products and services is to discourage that. As a consequence, fewer people have jobs, availability of products is reduced so costs are higher, and services are curtailed.
        But those in power always want more power and control. And we put them there.
        Better our benevolent masters just run the money printers non stop, give the voters the bribes they are addicted to and dilute the value of everything we have. Maybe we won’t notice.

        • It’s an economic truism that when you tax something you get less of it and that when you subsidize something, your get more of it.
          Progressives want to tax work so that they can subsidize those who would rather not work.

      • Like most progressives, loydo can’t understand why everyone doesn’t want to steal other people’s money.

    • Speakyof BIG BROTHER, I have been thinking that Big Tech has too much money, so an internet advertisement tax just might do some good.

  7. It’s not at all unexpected that people who can’t understand basic science will have trouble understanding basic economics.

    This is the kind of nonsense twitter should be flagging as unreliable …

  8. Here in the UK we already pay well in excess of $20/tonne in tax for carbon based fuels. With coal at $500tonne (domestic prices) we are paying around $100/tonne tax already. On petrol and diesel, the tax levied is around 66% of the pump price, so around $800/tonne paid for that resource, goes straight into the taxman’s pocket.
    Maybe the economists can explain?
    How does a further $20 levy on such carbon rich items, make the slightest difference to people’s purchasing attitudes, or to people’s economic exuberance, and thereby, cause the economy to grow by 2%?

    • Oh but just think about how the UK government has used all of that carbon revenue to change the weather. It used to rain so much in the UK, now its nothing but palm trees and sunshine every day. Money well spent.

      • UK petrol is about £1.175 per litre. Broken down as follows:
        Cost to seller 35p
        Profit 5p
        Fuel Duty 58p
        VAT 19.5p

        So yeah, near as dammit 200%

    • Humanity could only progress when a better / cheaper way was found to generate energy and make it more available. That’s when economies boomed because more labour could be done by less people. Now we are going backwards by making energy less affordable and less available. How can that be good for the economy?
      In the cold of winter people will burn anything that burns to keep warm. How can that be good for the environment?

  9. Merkel, Biden and Harris are in line with IMF.

    Merkel declared in TV that Germany’s Constitution will continue to be put out of force until the Corona Virus is defeated. Germany is still in a state of emergency.

    This provoked a thought in me:
    This is obviously a war. Sweden is again so bravely neutral, just as they were during the war 1940 to 1945. Sweden is pro both sides of the war, somewhere in between lock-down and not.

    Grass roots like Yellow Vests and Naomi Seibt fight against the war lords’ hired child soldiers like Greta Thunberg and authorities like UN, IMF, World Bank and the Pravdas.
    The war lords use artillery like Climate Change Policy, Corona Submission Tool and Race Segregation, whereas the Freedom Fighters are censured to oblivion by the war lords’ propaganda machine.
    Like in 1945, will the USA come to rescue or will Biden/Harris join the war lords?

    • Carl,
      You forgot to mention the other key name with Merkel and company i.e. Christine Lagarde. She is now head of the European Central Bank (ECB) was previously head of the IMF and was given the role to oversee the German based ECB, headquartered in Frankfurt. It doesn’t get much more nepotistic than that.

      • Now wait a minute – let’s get the hierarchy right : Ursula van der Leyen being EU boss, Lagarde and Merkel are second in command.
        And all are doing Mark Carney’s bidding, the UN Climate Finance advisor.
        And they wonder why there is a glass ceiling…

  10. Perhaps The Guardian should restrict themselves to normalizing diversity: too many white girls from next door at the Olympics.

    Misaligned change… To be managed by an enlightened minority. Been three, done that.

  11. A good example of how more tax results in less revenue:

    The Danish government needed more money (they always do). They found that more tax on snaps was the solution, as they already had around 1000% tax on it.

    Thought was put into action, the government raised the tax on snaps.

    Half a year later the government retracted the extra tax, as they found that unlawful home distillation and less sold snaps resulted in less revenue.

    I bet you that genuine intelligent economists could have told the politicians this beforehand.
    What about the IMF activists listened a bit to the genuine independent economists?

    • A cancer (government/those in power) only knows about growing and doesn’t understand it is killing the body it is feasting on.

      But then how many vote for a certain kind of government for the Free Stuff they are promised?

      Just lower the voting age and promise free chocolate.
      Movie ‘Wild in the streets’ 1968

      • Ah, that is where this expression comes from 🙂

        Now “tilting windmills” come to mind.

    • Australia tried something similar under the Rudd government.

      Via a loophole premixed alcohol (ie vodka and orange in a can or bottle) paid less tax than other types of common drinks and was therefore cheaper to buy in pubs and clubs.

      “Oh Noes!!!” said the Health Minister. “This will cause young women to binge drink and that will be bad for their health!!!”

      So despite the fact the Government’s own suggestions was for young woman to buy pre-mixed when out to help reduce the risk of drink spiking – which was apparently a major problem despite any real evidence – the Government closed the tax loophole. This, they proudly claimed, would reduce binge drinking which was a GOOD THING(tm).

      Also, it was going to raise heaps of extra tax revenue, so that was good too.

      So… reduce consumption AND help raise extra revenue…

      Our MSM utterly failed to question how this new law could do both.

  12. Churchill I guess they don’t read?

    “We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

  13. It’s as stupid as an eternal motion machine.

    You can’t take money out of peoples pockets… lose a large slice of it moving around a bureaucracy then spend the remainder to greater effect than leaving it where it was…

    • Michael,

      You nailed it. I call it “bureaucratic friction”. For every dollar you send government at least 10% gets rubbed off by bureaucratic friction – paying bureaucrats wages, paying rent seekers with government contracts, and in corruption. That 10% can’t raise GDP because it generally never actually gets invested properly in growing the economy via investment. Taxes can’t actually grow GDP, taxes only changes citizen spending into government spending – a net wash. That 10% that gets rubbed off in bureaucratic friction *could* have been used by the people to save – which represents an actual infusion of productive capital into the economy which *would* grow the economy.

      Friedrich Hayek must be crying in heaven by this idiocy.

      • Only a progressive could come up with the idea that you can get richer by moving your money from one pocket to another.

    • Especially since the government always spends that money by either buying votes or by giving it to friends and relatives of politicians.

    • The Big Bad Wolf was a proof of the Münchhausen trilemma not being a dilemma.
      As Walt Disney’s Big Bad Wolf was out in his sailboat on a calm sea, the wolf managed to sail along by blowing on the sails.

      Physics doesn’t matter. Where there is a will, there is a way.

  14. “Acting on climate change can get us out of recession.”

    Then please act, for F… sake, by handing over all of your cash and worldly possessions to the government. The rest of us won’t try and stop you. And once you have noting left you can ponder the merits of what you wrote above.

  15. Lest we forget, carbon taxes are about punishing fossil fuels in favor of “green” energyand the entirely fraudulent and illegitimate “green economy”. To then further suggest that carbon taxes will “boost GDP” is laughably wrong and a total lie, as it would do the complete opposite.

      • The greens hate people in general, though they are willing to make an exception for the rich people who bankroll them.

      • As long as the poor vote for people who promise them ‘Free’ stuff they will stay poor forever.

        That’s why the education system is so bad. They want you to be stupid and obedient. Slavery has never been abolished, they just changed its appearance.

        The big difference is that in the early days a slave could become a free man. Today you are slave forever.

  16. Replacing an efficient resources like fossil fuels with expensive, unreliable renewables will hurt the economy.

  17. Taxes don’t boost growth. They simply take money that could have been used for productive purposes and put it in the hands of corrupt politicians.

  18. Biden’s economic team is also pushing the notion that trillions in new taxes are just what the economy needs to restart growth.

  19. “A $20+ Carbon Tax would Boost Economic Growth”
    and by implication $40+ will get us all twice the boost. This economics stuff is so easy like treclicity from Gaia.

  20. Carbon tax, wind turbine/blade tax, photovoltaic/cell tax, etc. A $20 reduction in taxes, prices, etc., an increase in productivity, a reduction of democratic dilution, would have a similar effect, less the corruption engendered through redistributive change schemes.

  21. Leftists’ astounding ignorance and stupidity on economics is breathtaking in its scope.

    I would like suggest Leftists read Bastiat’s “The Broken Window”, to understand why it’s impossible to irrationally misallocate limited resources to create prosperity, but you can’t fix stupid or religious fanaticism….

  22. The government always does the best job of using other people’s money for it own benefit. SARCASM
    The carbon tax would make the public pay increased costs for everything. The total volume of money exchanged would increase for all goods and services sold. The result would be inflation. No one would be better off except the government workers hired to administer and collect the tax.

  23. “…the stimulus effect of spending all the extra revenue which would be squeezed out of the world’s taxpayers would make the carbon tax a net benefit for the economy.”

    So, when the neighborhood pool needs more water, all they have to do is syphon water from the deep end to the shallow end and the water level will increase. There’s no need to pay for more water. And, according to The Guardian and the IMF, it works even if you use a leaky government hose to syphon the water. Who knew?

  24. It’s simple: Raising the cost of transportation, which is what a Carbon Dioxide tax does, causes the price of everything in the economy to increase, which takes money out of everyone’s pocket, rich and poor alike, and prevents them from stimulating the economy with the money they would have had but for the tax.

    People spend money much more efficiently than government because they are spending in their own self interest.

    Government wastes much of the money it spends, so given equal amounts of money to spend, consumer spending will stimulate the economy more than will government spending, and consumer spending does not increase costs across the economy, whereas taxing transportation does increase costs, so we have the double-whammy of government spending being more inefficent than consumer spending and the taxation required so government can do the spending increases the costs of everything, so we get inefficient spending and the price of everything goes up to boot.

  25. Famous movie lines:

    Benjy Benjamin: Look! We’ve figured it seventeen different ways, and every time we figured it, it was no good, because no matter how we figured it, somebody don’t like the way we figured it! So now, there’s only one way to figure it. And that is, every man, including the old bag, for himself!
    Ding Bell: So good luck, and may the best man win!
    Benjy Benjamin: [to Mrs. Marcus] Right! Except you,lady. May you just drop dead!
    Lennie Pike: All right, all right, we all agree on that. Now look, let’s be sensible about this thing. There’s money in this for all of us. Right? There’s enough for you, there’s enough for you, and for me, and for you, and there’s enough for…
    [they all race to their cars]

  26. “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” Winston Churchill. He knew a thing or two.

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