Free Markets, Free People

The Green Shift, again

QandO founder Jon Henke posted at The Next Right yesterday with a suggestion for Republicans that I didn’t think would be very controversial: that they should propose swapping out the payroll tax in favor of a carbon tax.  I’ve established that I’m all for that idea. Though I would go farther, it’s a good idea on its own, especially when unemployment is high and hours worked are very low.

Go over there and read his reasoning (please don’t comment unless you’ve read it).  It makes a lot of sense, whether you believe in anthropogenic climate change or not.  Well, unless you do believe in it, and think it’s such a good thing that it overwhelms the benefits of switching from a relatively destructive tax to a better one.

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36 Responses to The Green Shift, again

  • Problem 1) Once we starting taxing “carbon” then we are on the road to taxing other “pollutants.”
    Problem 2) It will be much easier to raise a carbon tax to higher levels in the future than it would be to increase the payroll tax (look how much easier it has been to increase taxes on consumption items than income).
    Problem 3) “Carbon” has been so demonized due to AGW that I think conceding to a carbon tax would bolster the political will to do more to our economy to “fix” AGW.
    Problem 4) You say “especially when unemployment is high” — wouldn’t a carbon tax hurt the unemployed extra-hard?
     
    Support 1) As a policy, consumption taxes are preferable to income taxes.
     
    Right now (without a lot of consideration on my part), I think the negatives outweigh the positives.

  • I read the post and disagree very much.  There is no scientific proof that humans have any material impact on climate change.  A carbon tax would be a tax on basically a made up demon.  As the first comment mentioned, that would be a door to making up other fictional demons to be taxed.
    Any tax or program installed to fight “global warming” is the camel’s nose under the tent.  You would be making a deal with the devil.  The tide is turning against the global warmers, why give in to them now?
    The only tax I would be in favor of substituting for ALL other taxes is the Fair Tax.

  • JWG –

    1.) What measurable “pollutants” remain to tax?  I generally prefer taxing those things to taxing employment.

    2.) I doubt it.  People notice when consumption taxes go up because it appears on every receipt.  People are more sensitive to losing income after it hits their wallet than before.

    3.) By what mechanism?  A carbon tax is far preferable to cap-and-trade on that count, since cap-and-trade creates huge opportunities for political patronage and pay-offs.  I don’t think the climate crusaders are getting discouraged — when they lose support, it’s because the costs of the things they’re proposing become apparent.  A carbon tax would make those costs explicit.

    4.) Yes, that’s true.  Although unemployment and underemployment hurt extra-hard, too.  Perhaps the unemployed could get a pass or a ‘prebate’?  I’m just thinking aloud here.

    • What measurable “pollutants” remain to tax?

      1) Nitrogen: Nitrous Oxide is a greenhouse gas. Nitrogen is also important to fertilizer and explosives, both of which can be very harmful to the environment. Nitrogen is also key to ammonia, which is present in many cleaning agents.
      2) Oxygen: Ozone, water vapor, and nitrous oxide are all greenhouse gases. Ozone has many, many industrial applications. Water vapor – nuff said. Nitrous oxide – see #1.

    • I doubt it.

      How much have tobacco and alcohol taxes risen? “Sin” taxes have skyrocketed. A carbon tax will easily fit in as a “sin” tax since harming Mother Earth will be a sin.
      Also, if you support a carbon tax, are you going to be seriously listened to if you try to argue against a sugar tax in soft drinks and a trans fat tax in foods? Shouldn’t you support a tax on the consumption of chemicals that raise the health care costs for everyone in America?

    • And let us not forget the ever popular particulate pollution. There are also mercury, sulfur oxides, and whatever else a bureaucrat can dream up. Once upon a time when I worked for a municipal government we cited a small business for emitting steam. Who says bureaucrats have no imagination or creativity?

  • Your idea of a revenue neutral tax is laudible (if you had to have a new tax, let it replace a different tax, like Krauthammer argued about a gasoline tax last year), but your premise is false.

    “The public generally agrees that something must be done about climate change…”

    Stating this totally misrepresents the issue for most people. The public generally DOES NOT agree with this, nor is there a consensus about the issue of AGW, or GW/CC at all.

  • Speak for yourself. I am NOT in favor of a “carbon tax.” It is a fraud. To be honest, global warming, or climate change, or whatever Orwellian name the Left has given it this week, is a FRAUD. The Earth heats up, the Earth cools down – this has been going on since the planet was created. Man has absolutely nothing to do with it. We cold shut down all economic activity for 100 years, and the temperature of the planet will not change 1 degree F or C.

    Al Gore needs help, and so does anyone who believes in “climate change.” It is a scam, brought to you by the Chicken Little Party, the Downercrats, because they always believe that the world is about to end unless we do something that THEY want.

    Polls are showing that people are not buying into the “climate change” horse manure. It ain’t selling. That’s why Crap and Trade will die a quick and deserved death in the Senate. And so it should.

  • Just as an aside, in central IL, on the 17th of July, at about 4:15pm, it was 69 degree.
     
    Damned Global Warming…

  • Okay, I can see that many of you feel this would be a capitulation.  I would suggest that you start by asking yourself one question: is it better to have a broad-based tax on carbon emissions or a tax on employment?

    After you’ve answered that, ask yourself if Republicans doing something that doesn’t piss off the global warming believers would be so bad that it makes the tax shift a bad deal.

    Jon’s claim about how much of the public believes that we should do something about GHG is secondary — that’s just one part of his argument about why this would be good politics in addition to being good policy.  The question of whether you believe in man-made climate change is not very relevant, unless you think that man-made climate change is occurring and is a very good thing.

  • Either a tax on employment or a tax on energy and production. Not much of a choice, and I doubt that a carbon tax has no effect on employment.

  • These days, the Republicans are deader than the Constitution, this strategy, in my opinion, would only make them more dead further down the road. To put this “choice” in a clearer perspective let me paraphrase: Do you want to escape from the door of the boxcar, or would you rather board the train to take your chances later?  

    Brown

  • timactual, a carbon tax is not a tax on production.  It’s a tax on consumption.  Production often involves consumption, but that’s not the same thing.  You can make your production more energy-efficient, and all you’ve done is consume less energy and contribute less to the various negative externalities that fossil fuels bring with them.

    The effect a carbon tax would have on employment would surely be less of a burden on employment than a direct tax on employment, would it not?

    Brown – Please provide evidence for your assertions. I’d like to hear your argument, and why it’s more compelling than mine or Jon’s. It would help if you addressed the points we made.

    • Production, consumption, two sides of the same coin. Price increases, production and employment decrease. End result is the same. If the tax is paid directly at the point of sale, how is the carbon content calculated? That is certainly a difficult and expensive indirect cost.

      Would an employment tax have more impact? Who knows? It is certainly easier to measure or quantify than an indirect tax.

  • I’ll try, but it won’t be this weekend. But, as a quick synopsis, we live in a carbon based world, you exhale CO2, The opportunity for taxing is limitless. Besides that, the premise of your and Jon’s angle on this is behavior modification. That’s slavery boys. I want to go to the lake, run my boat, fly my airplane, burn coal on my barbecue and I want to do it without those assholes in Washington using the force of government to punish me for doing it. If I can afford to do it every damn night I shouldn’t have to pay those assholes one thin dime because of it.  How about, we get rid of the income tax and then shit can cap and trade and the carbon tax. There is no such thing as AGW. The only thing real is a bankrupt government with an addiction to ours and future generation’s money. They have to go, not my freedom.

  • This is an attack on progress.  It favors manpower over machine power.  If we had this thinking 100 years ago, we would slowed the industrial revolution if not right out stopped it.
    In the end, to get the job done, you have to either use people or machines.  If you use machines you must use carbon related energy with our current infrastructure.
    Seemingly progress causes unemployment.  But that’s only at first.  In the long term it actual frees people.  5 day work week, no child labor, etc are all the result of progress.  The efficiencies of machines and freeing people from toil, aka our modern quality of life, are a direct result of using energy.
    This would be a regressive tax in multiple senses of the word regressive.

  • two comments.
     
    1) the spacing that the dialog box gives between paragraphs doesn’t translate over to the final comment format.  Making me someone bullet list of thoughts seem even more kluged.
     
    2) The grasp of how and why our modern world exists seems to have escaped the grasp of conservatives as badly as liberals.

  • Brown -

    You agree that production is necessary to human survival, right?  Well, the payroll tax is a direct tax on production.  So a tax on fossil fuels (or, if we grant that there’s a slippery slope to taxing everything that emits carbon) isn’t really a step down.

    Besides that, the premise of your and Jon’s angle on this is behavior modification. That’s slavery boys. I want to go to the lake, run my boat, fly my airplane, burn coal on my barbecue and I want to do it without those assholes in Washington using the force of government to punish me for doing it.

    All taxes modify behavior.  What we’re suggesting is a tax that targets a different kind of behavior, and is less destructive as a result.  Conservatives and libertarians, to the extent that they tolerate any taxes, have long preferred a broad-based tax on consumption over a tax on production for this reason.

    If you want to go on the lake and do those other things, you’re already being punished for doing what is necessary to acquire those things: you are being punished for production.

    If I can afford to do it every damn night I shouldn’t have to pay those assholes one thin dime because of it.

    Whether you can afford to do it depends to some degree on the payroll tax, does it not?  You’re just paying the dime before you even get your hands on it, and regardless of whether the thing you want to do involves a lot of fossil fuels or not.

    How about, we get rid of the income tax and then shit can cap and trade and the carbon tax.

    Until you figure out a way to do that, would you prefer a payroll tax or a carbon tax?

    -=-=-=-=-=-=-=-=-=-=-=-

    jpm100 -

    I share your appreciation of machines, and I totally agree that substituting machine power for muscle power has improved our lives considerably.  However, as far as it applies to a carbon tax, not all energy use is for production.

    And people are still going to use energy and machines, but with a carbon tax they’d be more likely to try to avoid energy waste and inefficiency.  They’d be more likely to demand energy sources like nuclear plants that don’t consume fossil fuels or blow off a lot of GHG, and which incidentally don’t contribute to the state coffers of the Middle East, Venezuela, or Russia.

    Also, I should state that I dislike a tax wedge on employment for much the same reason that I dislike the minimum wage — it prevents people from entering productive relationships to which they would otherwise agree.  People gain valuable experience from having jobs, and especially jobs that aren’t make-work BS.  Plus, it keeps them off the unemployment rolls, which is nice as long as it’s politically impossible to get rid of unemployment benefits.

    Edit – I don’t know what’s creating problems for you in comment spacing. It works for me in Firefox 3.5.

    • You agree that production is necessary to human survival, right? Well, the payroll tax is a direct tax on production. So a tax on fossil fuels (or, if we grant that there’s a slippery slope to taxing everything that emits carbon) isn’t really a step down.

      The refutation to this is that you can control your payroll far more easilty than you can control the inputs to and byproducts of production.

  • I think any tax, carbon or payroll, takes away a bit of a person’s freedom.  What you are arguing here is to replace one loss of freedom for another loss of freedom, as if that will keep the leviathon satiated.  You are saying to the monster, “My Lord, you won’t miss anything because I offer this piece of my life in exchange for another.  Please do not kill me”.  I cannot choose which tax I would prefer because to do so is to give in to trap of offering up my freedom and pretending it is my choice.   I understand the need for a very minimal amount of government control, but we are WAY past that point.  The only fight now should be to take back our freedom by cutting taxes, not trying to compromise with an entity that does not know the meaning of the word.
    Yes, I know we are WAY down that path, but I still reject the choice.

  • Bryan -

    “You agree that production is necessary to human survival, right?  Well, the payroll tax is a direct tax on production.  So a tax on fossil fuels (or, if we grant that there’s a slippery slope to taxing everything that emits carbon) isn’t really a step down.”


    I’ll agree that production is necessary for an individual’s survival. If I don’t produce what I need to survive then I’m in trouble. Something the Republicans, Gingrich and others, used to refer to as “rugged individualism”. Any method used by a central government to extract money from the individual hinders that individuals means of survival. Your argument that it isn’t really a ‘step down’ doesn’t hold water because the government doesn’t care about the individual, only the collective. The carbon tax, the way you and Jon envision it – as a means of limiting the growth of government, is a fantasy. The Federal Government will only continue to grow and it will extract the funds for that growth regardless, until it is gone, either by its own weight or the ushers.

    “All taxes modify behavior.  What we’re suggesting is a tax that targets a different kind of behavior, and is less destructive as a result.  Conservatives and libertarians, to the extent that they tolerate any taxes, have long preferred a broad-based tax on consumption over a tax on production for this reason.
    If you want to go on the lake and do those other things, you’re already being punished for doing what is necessary to acquire those things: you are being punished for production.”


    Whether it is taxes, fees or regulation (Behavior modification) the purpose of the current group in DC is to micromanage the collective. A carbon tax will expand that power base. Further control, through regulation, attached to the carbon tax, will effectively crush certain industries, most particularly those industries that mobilize individuals. Look at it as an opportunity for Government to add infinite layers of management over everything carbon. At least with a payroll tax, people could circumvent the taxes in a variety of ways by hiding income; that would disappear with a carbon tax thusly expanding the power of government. It is certainly a step down in that regard as it makes it easier for the government to steal from you.

    “Whether you can afford to do it depends to some degree on the payroll tax, does it not?  You’re just paying the dime before you even get your hands on it, and regardless of whether the thing you want to do involves a lot of fossil fuels or not.”

    The ability to be mobile is the very definition of freedom. Fossil fuels are primary to individual mobilization. $10.00/gal gasoline is an attack on freedom.

    “Until you figure out a way to do that, would you prefer a payroll tax or a carbon tax?”

    I won’t ever prefer either and if everybody felt the same way we wouldn’t have them. (I know, if a frog had wings…) There are other ways to fund a very small, but adequate, government that is not central to everyone’s lives. The current system is “rigged” and there simply is no way possible to roll it back by working within the parameters created by that system. Unless, a viable third party can gain power and roll back hundreds of thousands of laws. Fat chance.

    The pathogenic nature of this Government has metastasized and is terminal. Expect, in the near term, a carbon tax and cap and trade and payroll tax and more regulation and ____________!

    It simply has to eat.

  • If I had to choose the lesser or 2 evils i would chose this over cap and trade.  At least this way the american people would see who is really robbing them on their pay stub instead of blaming corporate america for jacking up the price of goods, services, and energy to offset what the gov’t is taking from them.
     
    Generally speaking though I don’t support any idea that gives ligitimacy to the global warming myth.

  • Would it be easier to replace the payroll tax with a straight up consumption tax? Doutbful.
    I think a carbon tax acting as a close substitute for a consumption tax makes sense in this case.
    Also, make sure it applies to imports as well as domestically produced consumption if possible.
    This idea would need to be packaged with a variety of other pro-growth measures, including specific ones designed to spur energy production, to be even more palatable.
    I am guessing we could find some regulations to kill that would act as non-monetary incentives to the oil gas and coal industries.
    Also, include a push for nuclear power.

  • Switching from income taxes like they payroll tax to consumption taxes makes lots of sense. Among consumption taxes, carbon taxes make sense, too, because they’ll help defund lots of people who hate us, and shake up the energy market. Shake-ups help new businesses form, and we’re the best in the world at taking advantage of change.
    However…the reason not to tie revenue sources to expenses is that the one tends to drag the other. I.e., if we need more money for Social Security, we start thinking about increasing carbon taxes. Bad logic. Or…if we think we need to increase carbon taxes, we think that means we can raise benefits. More bad logic.

  • Larry -

    “Among consumption taxes, carbon taxes make sense, too, because they’ll help defund lots of people who hate us, and shake up the energy market.”

    How about China & India? They will continue to purchase the most efficient means of power production, oil, from the people who hate us and increase their GNP at a rate several times that of our own. The oil producers that hate us, no longer need us. Please, define change and how it is going to allow us to compete against people who are using the most efficient means of power production to manufature wealth?

  • I have posted a similar proposal before, an imported fossil fuel tax offset by lower payroll taxes.  (not for environmental reasons but to ween us off of foreign oil.  I was soundly trashed among both libertarians and conservatives. But it would have been a lot better than anything the current group in congress can cook up.

  • Call it the ‘Carbon Added Tax’, or CAT. Like the Value Added Tax (VAT) it imposes a tax at every step of production where the taxable item, carbon in this case, is added. Both are stealth taxes. All the end buyer knows is that everything is more expensive.

    How many bureaucrats does it take to determine the carbon content of a product? And, of course, every time a production process or supplier is changed, a new calculation is required. I suppose this expansion of the bureaucracy makes up for the lost jobs caused by the price increases.

  • I wish I wasn’t having trouble with the threaded Reply feature.  It automatically puts all my posts at the bottom.
    Steverino - Quite the contrary.  Anyone can change their energy use instantly.  Far fewer people can instantly negotiate a change in their wages.
    jjmurphy - Of course you can choose one tax over another.  You talk like having two options you don’t like frees you from having to choose between them.  If you’re indifferent between two taxes, and can’t repeal the one on the books, you choose the status quo by default.  You have chosen the payroll tax.  Considering whether the carbon tax might be less destructive is not a trap.
    Brown -

    Your argument that it isn’t really a ‘step down’ doesn’t hold water because the government doesn’t care about the individual, only the collective.

    The one has nothing to do with the other.  No matter what the government cares about, a payroll tax modifies behavior: it discourages employment, production, labor.  To switch to a carbon tax is not a step down in that regard — instead, it discourages a certain kind of consumption that comes with a variety of negative externalities.

    Whether it is taxes, fees or regulation (Behavior modification) the purpose of the current group in DC is to micromanage the collective. A carbon tax will expand that power base. Further control, through regulation, attached to the carbon tax, will effectively crush certain industries, most particularly those industries that mobilize individuals. Look at it as an opportunity for Government to add infinite layers of management over everything carbon.

    I disagree.  A carbon tax is far preferable to cap-and-trade in this regard.  A carbon tax is fairly broad-based and rather simple to apply, while cap-and-trade allows far-ranging micromanagement, political payoffs and shakedowns.  It does not, contra timactual‘s statement, involve taxing every product according to its carbon content.  It taxes fossil fuels.

    At least with a payroll tax, people could circumvent the taxes in a variety of ways by hiding income; that would disappear with a carbon tax thusly expanding the power of government. It is certainly a step down in that regard as it makes it easier for the government to steal from you.

    You can change your behavior to lower your carbon tax bill a lot easier than you can avoid payroll taxes.  If you work for any employer above the table, you have to pay payroll taxes.  To lower your carbon tax bill, you have to use less in the way of fossil fuels by making your activities more energy-efficient.

    The ability to be mobile is the very definition of freedom.

    The means to be mobile is positive liberty.  Movement without being coerced is negative liberty, the type of liberty underlying the entire Madisonian idea — the structure of the Constitution, the Bill of Rights, the whole shebang.

    “Until you figure out a way to do that, would you prefer a payroll tax or a carbon tax?”

    I won’t ever prefer either and if everybody felt the same way we wouldn’t have them. (I know, if a frog had wings…)

    I’m not asking you if you prefer one of those taxes over no tax.  Obviously you’d like to have no tax.  But there’s no point in refusing to prefer one tax over another tax.  All that does is ensure that the status quo tax remains in place, even if a less destructive option exists.  I know you believe that some taxes are more foolish to levy than others.  You’re spending an unusual number of words ripping on the carbon tax for someone who has no preference in the matter.

    How about China & India? They will continue to purchase the most efficient means of power production, oil, from the people who hate us and increase their GNP at a rate several times that of our own. The oil producers that hate us, no longer need us. Please, define change and how it is going to allow us to compete against people who are using the most efficient means of power production to manufature wealth?

    If an American wants to compete with a Chinese, he should develop his productive capacity, which typically means having a job.  The mind is what creates wealth.  That’s why we get more out of oil than the Middle East does — we know what to do with it, we know how to make it do more.  We do better with each unit of matter, energy, space and time than they do.
    Mac -

    Generally speaking though I don’t support any idea that gives ligitimacy to the global warming myth.

    That’s okay.  You can support it on your own grounds.  Pretty much all winning political alliances are built on the overlapping interests of people who have very different motives and beliefs.

  • I have a plan to put 3 million Americans to work. Hire 1.5M Americans to dig holes, hire 1.5M Americans to fill those holes, and pay them all $30k/year. For $90B/year, this is much less expensive than Gestabobama’s stimulus.

  • Bryan –

    Well, I can see we’re not going to agree on the carbon tax. Ha! In any case, I’ll buy you a tomato sandwich if Republicans sweep the next elections running on a “carbon tax”.

    That aside, I would like to address this:

    “If an American wants to compete with a Chinese, he should develop his productive capacity, which typically means having a job.  The mind is what creates wealth.  That’s why we get more out of oil than the Middle East does — we know what to do with it, we know how to make it do more.  We do better with each unit of matter, energy, space and time than they do.”

    You’re just flat wrong, making that statement, at least in the broader sense. I have just finished an analysis of some permanent mold castings from China and the USA. Other than some slight design changes to the tooling, nothing to do with the manufacturing, the castings made in China were absolutely equal in quality to the casting made in the USA, and here’s the rub, the Chinese tooling cost 1/5…that’s one-fifth, that of the USA tooling and the parts cost about ½, shipping included. Another client in Australia insists on using Chinese pattern shops and foundries because of this, even though his market is in America. I find that, the more people who find out about this disparity in cost and the true quality of products, the more that are taking advantage of it. That’s a real world problem for the US work force. This is how many people in manufacturing are getting wealthy.

    I’m sure you can show me statistics and graphs that explain how efficient we are in our use of oil, but I will show you manufacturers that are lining up to pay Chinese companies $20,000.00 for equal quality tooling that cost $100,000.00 here. In my opinion, since the great information transfer during the Clinton administration and the advances in CAD/CAM during the last decade, we in the US are on the verge of turning into bit players on a world stage. Our Government is stifling invention and productivity; they are making the Communists in China look good, it doesn’t take a great “mind” to figure this one out. An American worker cannot compete in the heavily regulated US unless subsidized by the Government, which is exactly why we have Government Motors. If Obama is going to make Government Motors profiable, he will move manufacturing out of the US and just do the assembly here. If these idiots pass any type of “carbon tax” or “cap and trade”, American industry will go the way of California industry…which is…somewhere else.

     

    The Chinese may have trouble with dog food, but they make damn nice aluminum castings and they’re drilling for oil along the US Gulf coast. They’re going to kick our ass while we play with inefficient technologies that are decades, maybe even centuries from being useful and who’s need is based on a lie.   

    Brown 

  • In any case, I’ll buy you a tomato sandwich if Republicans sweep the next elections running on a “carbon tax”.

    Safe bet to make, since Republicans almost certainly aren’t going to run on it by 2010.  I know there are Republican politicians who believe this tax shift makes sense as both politics and policy, but there’s no leadership in the party to rally everyone around fresh ideas in time for the 2010 elections.  They’ll play it safe — criticize the party in power, talk like they think a conservative ought to talk, and propose nothing that is viable even if Republicans were swept back into a majority.

    You’re just flat wrong, making that statement, at least in the broader sense.

    I thought my argument is correct in the broader sense, but has a variety of particular exceptions.  I agree that the government is stifling invention and productivity in many ways.  But American workers can and do compete with the Chinese, when they learn to do things that the Chinese can’t do.

    China has some serious problems baked in.  Over the next decade or two, I’m more worried about a Chinese collapse than a Chinese ascendancy.

    If these idiots pass any type of “carbon tax” or “cap and trade”, American industry will go the way of California industry…which is…somewhere else.

    C’mon, firms aren’t fleeing California because of any tax shift.  In fact, aren’t labor costs part of the problem?

  • “C’mon, firms aren’t fleeing California because of any tax shift.  In fact, aren’t labor costs part of the problem?”

    The problems are indeed multifaceted, for sure, and our quick opinions and blurbs only touch on some of the high spots. There is one indisputable fact though; the decline of the US and its manufacturing powerhouse can be laid directly at the feet of the politicians who have bowed on bended knee to the green religion.  If this has been perpetrated by a foreign government over a generation it’s been a brilliant strategic move. If this is self-inflicted, it’s a tragedy.

    Several years ago a friend from California was telling me about the industry leaving his area. He said, “They’re not just closing the buildings, they’re deconstructing the buildings and selling them off, they’re not coming back.”   

    Brown  
     

  • “Learn to do things the Chinese can’t do”????

    Like what? It is going to take one heck of a lot of innovation to overcome cost differences like Brown cited. There just isn’t that much innovation available for basic industrial processes like casting, machining, etc.

    It’s not the workers that do the innovations, anyway. It’s the engineers, managers, and scientists. And if you have not been on a college campus lately, there isn’t much chance that all those Chinese students (undergraduates and graduate students) are going to miss any new stechnology. Some of that new technology is being developed by those Chinese students.

  • Like what? It is going to take one heck of a lot of innovation to overcome cost differences like Brown cited. There just isn’t that much innovation available for basic industrial processes like casting, machining, etc.

    Like what?  Like a whole lot of things — things that can’t be outsourced due to their local nature, things that require a large base of educated people, things that are extremely technologically advanced (aircraft, advanced electronics, software engineering, weapons/defense equipment, etc.), creative endeavors and services at which foreigners do a substandard job.  It’s up to each of us to make ourselves difficult to replace (and it would help if the government didn’t stop us from doing so).  Perhaps our comparative advantage isn’t in basic industrial processes anymore.

    It’s not the workers that do the innovations, anyway. It’s the engineers, managers, and scientists.

    An engineer, manager or scientist who grosses $200,000 this year costs his company at least $9,577.60 in federal payroll taxes, and loses another $9,521.60 in said taxes on his side.

    So if we eliminated federal payroll taxes, the company that employs this person could lower their labor costs by $19,099.20 and still increase the employee’s take-home pay by thousands of dollars because the employee wouldn’t have to pay income taxes on his $9,521.

    And if you have not been on a college campus lately, there isn’t much chance that all those Chinese students (undergraduates and graduate students) are going to miss any new stechnology. Some of that new technology is being developed by those Chinese students.

    I graduated from college in 2007.  I don’t think it’s as simple as them “missing” technology — whatever knowledge they bring back to China, they need to be able to apply to its fullest, and there are big limitations on that in a country with such limited human capital.

    And there’s another field at which Americans apparently excel: higher education.  If only we allowed our lower-level schools to do the same.

  • Carbon Taxation is the best way forward, I agree – enviromentally.

    And it will never be considered by any left wing party, because if externalising the cost of pollution is seen to work it logically follows that it will work most effectively when all pollution can be regulated by such. And government is the one sector of the economy that is least affected by externalising pollution costs, because what they pay they gain in tax. Thus if externalising carbon pollution works – “we need smaller government to save the planet”.

  • A little late, but Europe competes effectively despite energy prices (not carbon taxes per se) far higher than ours…The proposal wasn’t a net increase, but to replace one tax with another – not that government is ever that rational.