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Yes, Cap and Trade is a political fight over the vested goodies of your allocated cap. I, and I believe most free market types, believe taxes are the best solution for infringement on a commons.
Some, such as me, would extend that principle to natural resources in general, particularly land, and make the taxes revenue neutral, requiring reimbursement of the taxes to the general public.
In this case, the problem that needs addressing is the quantity of carbon emitted. Cap and trade addresses that number directly. A carbon tax addresses it indirectly: the gov. has to figure out the right level of tax to get the right level of emission reduction in an open market, and continually play with that number to keep it well calibrated. That seems the level of skill that governments (or anyone for that matter) don't possess.
The idea that the government can figure out the right level of emissions to begin with assumes a level of skill that nobody possesses.
Taxes have four major advantages over cap and trade schemes - first, they're less prone to crony capitalism; preexisting companies don't get a major advantage over new entries. Second, they don't disrupt the existing market; you don't hit a wall in which half the power plants in the country are simultaneously shut down. Third, they allow flexibility. Fourth, they're incremental; they -continually- encourage reduction of carbon emissions; see Europe where the market for carbon credits has effectively collapsed to see what happens when carbon drops unexpectedly; instead of a smooth reduction as possible, it's jagged and arbitrary.
Why is this a problem? If the emissions are being reduced, then the gyrations of the carbon credit market are irrelevant. If the prices have collapsed, it means that carbon reduction is turning out to be much easier/cheaper than expected. Yay!
I calculate the cost of this carbon reduction to be $3.3 trillion per year across all of Europe. That's how much smaller their economy is as a result of the recession for which the drop in CO2 was merely an externality. I'm not sure celebrations are in order.
Some studies (which I don't have to hand immediately) suggest that the recession was only partially responsible for the reduction.
But the price of carbon still remains irrelevant. As long as the reduction happened, the price could be zero for all the difference it makes. We aren't trying to punish people for emitting too much carbon, making them pay the moral price of their erroneous ways. We're simply trying to reduce carbon emissions.
I don't see any drawback to the price of carbon having collapsed.
If your goal is long-term reduction in CO2 emissions, you've introduced market volatility. The goal of any such measure is to reduce CO2 emissions, but the -mechanism- by which it does so is encouraging research into alternatives. If the market is volatile, the value of any such research is called into question; tomorrow it might be valuable, it might be worthless. A tax, by comparison, has a fairly static value. The cap-and-trade measure, through its volatility, increases the risk of investment into reducing carbon emissions; the value of your investment isn't determined by the degree to which you can reduce carbon, but by the amount of carbon emitted in the market as a whole.
Unless we assume some level of carbon emission is better than no carbon emission, the tax scheme is better.
Yeah, a quota is absolutely inelastic supply, giving wildly erratic price. Pricing incremental emissions gives incremental feedback.
I don't think this one is hard. In either case, you have to assume an measurement by which you're accounting for emissions.
Yes, you won't exactly hit your targets, but then you adjust the price and move on. We're talking about accumulations that matter over a period of decades. Consumption varies, but it's not all over the place.
In other words, let the government sell it to the public.
Since they're taxing the public anyway, they could reimburse it just by letting the public pay that much less taxes. This is exactly the same as what would happen if they used it for revenue, and decreased taxes because they don't need as much revenue.
More of a leasing scheme with respect to land. You get it as long as you pay your taxes on it. Which is largely the way it is now.
The difference isn't about stopping global warming or funding government, it's about justice. If there is a commons that everyone has equal right to use, those that do use it owe compensation to those who don't, not the government. The funding mechanism is a separate issue from this basic issue of justice. The government is collecting what is owed by some parties to others; that doesn't give it a license to keep as much of it as it wants.
It works out the same either way. Loans and investment act as a way to exchange present money and future money, so charging present money vs. future money makes about the same difference as charging USD vs. euros.
If they're charging enough taxes to offset the value of the land, then that means that the price of buying land would be zero. You will pay the full cost with taxes.
But there is no difference. The money gets passed around exactly the same in either case. Is it really more just to give someone a reimbursement then immediately take it back as taxes than to do nothing?
It has the license to just take what it wants in the form of taxes. I would expect that to work as a license to keep what it wants.
No, the money does not get passed around the same way.
The homeless guy living under a bridge has no property, Homeless guy doesn't get taxed on land, Bill does, divide Bill's taxes between Bill and homeless guy, and homeless guy ends up with a check that he doesn't get now.
Homeless guy has no income and no wealth to tax for the support of government. I guess with a head tax, we could make the result the same. We could find ways to make the result the same, but we'd really have to be going out of our way to do it.
Perhaps from you, but not from me. That is largely what political arguments are about in the US these days.
If you're assuming that taxes are otherwise just a constant portion of your income, or really any tax system that's specified to be the same in both cases, then there is a difference. However, the two systems are the same modulo tax method. In other words, in one case the homeless guy gets money from Bull's land, and in the other he gets money from welfare.
I don't understand.
Nope, not the same with the addition of welfare either. People on welfare often face effective tax rates in excess of 100% - if they start working and making money, they lose benefits worth more than their incremental income.
Perhaps the government has such license from you, but they don't have it from me, or a great many other people.
That is a problem with how welfare is currently done. It would still be welfare if they didn't do it like that. I'd just implement it as taxes going into the negatives.
So, they're not allowed to collect income tax from you?
Yes, if it were very different than what it is, it could the same as something it currently is different from.
Here's what you said originally:
Here's my response:
Your last question just doesn't follow at all. Where did I suggest they're not allowed to collect income tax from me?
My point is, they're allowed to do taxes and welfare however they want. Unless you're suggesting limiting their power in that regard, the difference between something you consider just and something you consider unjust is something you are okay with them doing.
There seems to be a misunderstanding here. The government is allowed to take income tax from you. Since they are already allowed to take money from you, it doesn't much matter if they're allowed to withhold giving something to you.
Looking at the rest of the conversation, it's possible you were referring to the fact that they can only take income tax if you have an income, so your version is essentially different in that it establishes a minimum amount that the government has to do for poor people.
One major problem is the practical effect of adding new taxes. Adding a tax creates a group of people who benefit from the tax, either a part of government that gets to decide how to spend the tax money, a recipient of tax money, or both, and it is in that group's interest to let the size and purpose of the tax slip beyond its original intention. A carbon tax might be a good idea if it is revenue neutral, but there's no way you can make one that is guaranteed to stay revenue neutral.
You can't guarantee anything because of political will. But take in taxes, count total, divide by eligible recipients, electronic transfer money. It's not complicated to make it revenue neutral if you have the will to do it.