Comment by aidenn0

> Shifting the cost to the rich doesn't change behavior and it doesn't reduce actual carbon.

Shifting cost to the emitters is a better way to put it. If a factory can make 10m in upgrades over time to reduce their carbon tax burden by 15m over time, they are definitely going to do it. So I disagree: I say it does change behavior and it does reduce actual carbon.

> There's a lot more low-income emitters than high income ones

Whether that's true or not it does not mean a carbon tax would not 'reduce actual carbon'.

The fuel/carbon tax would still be behavior-shifting for low-income emitters because it would still apply to low-income emitters per marginal unit, and that part is likely overall regressive because fuel is a larger expenditures for low-incomes.

However, the part where the resulting revenue is pooled and payed out in an equal amount back per capita is progressive, since that payment is a greater fraction of a low income. Desirably, it also means that low-income people emitting less than the average would make money overall: consider a household consisting of a single mom and two kids that take public transit to work/school.

It would change behaviour more, not less.

If you set the carbon tax at about $1/gallon of gasoline, the corresponding carbon rebate would be about $1000 per family per year.

That wouldn't affect rich people much; neither the $1/gallon nor the $1000 extra income is significant. But many rich people get rich by being penny-wise, so many would change behaviour, by buying an EV or similar.

But for poor people both $1/gallon and $1000 per year is significant. If gas was $1/gallon more expensive, poor people definitely would drive less.

> By making them not regressive we don't change behavior!

I'm poor. I could get just the $X back as my carbon tax dividend and continue with my current lifestyle. Or I could make choices that emit less carbon, which will cost less since they don't have a carbon tax cost to them, and save an additional $Y on top of the $X I'm already getting.

What do I do?

A revenue-neutral tax (like GP proposed) could, in theory, change behavior. I don't know enough about human behavior to say how it would work in practice.

Let's say that instead of taxing carbon, we pay people a bonus for emitting a below-average amount of carbon (proportional to the amount that they are below average by). If the amount is in a certain range, it will be too small an amount for wealthy people to care about, but large enough for poorer people to do things within their means (e.g. carpooling) to try to get it.

The results would hit certain geographic areas much worse than others, and (if priced enough to change behavior) would also probably depress car sales, which are two reasons why the federal fuel tax has been flat for over 30 years.

This is mixing two questions: whether a system can be elegantly designed and do the job without major market distortion, versus the question of whether various actors will stand in the way to prevent it.

You could say the same thing about zoning. Higher density is better for affordability, but faces opposition from landowning existing residents. Does that make it wrong, or not worth pursuing? No, and that particular movement seems to be getting traction despite the political opposition.

I read "trivially fixable" as "there is an elegant solution to this," not that "it is easy to get it politically passed."

The carrot is doing the things you want to do like getting from A to B or building a home.

Government ‘carrots’ are almost universally a terrible idea because they codify specific solutions. Instead you can get the same effect more efficiently with a carbon tax large enough for people to notice.

Rich people use more energy. That’s been shown by loads of studies.

Maybe they drive a more efficient car, but they own much larger houses which are heated or cooled consistently, they travel a lot more, and they buy things with embodied carbon emissions.

Do you think flying evades the carbon tax?

This tax is only assessed on road transportation. It ignores aviation, industry, or any one of the other sources of carbon.

Some European countries have total taxes to the tune of 90+ cents per liter (50-60% tax) with current gas prices, for reference. (~65ct/l for the energy/carbon tax, specifically)

I don’t think that level is sufficient to cover the externalities.

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.

> 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.

I have a suspicion the reason why super wealthy people like say Musk but he isn't the only one hate subways and high speed rail is because they fly everywhere. You might like if you could get on the subway in Glen Park and be at lands end in half an hour. You might like getting on a high speed rail and being in LA in 4 hours.

These guy will never ride a subway or take a train anywhere.

The same thing that differentiate a private car from public transportation or freight, I would think. This distinction isn't a particularly novel problem.