There is no reason to assume that all consumption taxes are automatically regressive. The use of taxation to influence behaviors is well documented. Reducing the wasteful use of energy can begin with progressive taxation of KWH; First 100 a month untaxed, next 50, .01$ per hr. next 50, .03$ an hr. next 50, .09$ per hr, next 50, .27$ per hr. next 50 .81$ an hr. increasing exponentially for all uses. This combined with changes in building codes, provides a ground for conservation in the use of electricity only, but similar measures can be introduced to encourage rational consumption of ‘cheap’ energy by making it reflect the Full Ecological Cost of its use. How is this ‘regressive.’ The expenditure of the revenue in ecological reparation, water, land fill, detoxification, restoration, as well as ecologically protective public works is one of the chief benefits.

I wrote about this 12 days ago.
Forgive me for repeating myself.

2013 Summer Statecom Proposals: Endorsement of Committee for a Green Economy's Carbon Tax Initiative http://www.green-rainbow.org/drutarr/endorsement_of_committee_for_a_green_economy_s_carbon_tax_initiative?recruiter_id=1501

It looks like this proposal has been withdrawn, but would definitely want the GRP to advocate in favor of a revenue-neutral carbon taxes (or as I would call them, carbon savings bonds) so I will promise to work with Dru Tarr, Brian Cady, and other interested parties in drafting a proposal for the Fall state com meeting. Suffice it to say that if you want to raise revenue (instead of being revenue neutral) there are better ways to do so, including by eliminating special giveaways for favored, highly politically influential industries (tax expenditures). The reason for a carbon tax is to broadly and comprehensively have the price of fossil fuels reflect the true environmental and social cost of their use (and the toll they inflict on our communities, including the siting of dirty power plants in poor communities). The challenge is that a tax on energy, like any sales tax, is regressive, and without assistance, the poorest among us may not have ways to reduce their energy use still further than they already do. Making it revenue neutral means you can take the money raised and return it directly to the residents of the commonwealth. You could literally just write checks (of equal amount) to every resident once a month. The poorest could use that to compensate for the higher cost of energy; anyone more fortunate could use some of the money to invest in the conservation and efficiency measures (and make a shift towards renewables) that will be needed to reduce carbon pollution and reduce the magnitude of the global warming and climate disruption still to come. What to do for local businesses and non-profits is actually important to think about, and I hope we will.

Hi all,

I submitted this proposal rather quickly to avoid missing the cut off date for proposals. I was hopeful for the CGE-proposed tax, but I’ve since received the language of the proposal and, after a more thorough review, found it disappointing. Compared to some other forms of carbon tax, this one is overly complicated and weak. I’d therefore like to withdraw my proposal to endorse this specific carbon tax.

I hope to bring a proposal to a future StateCom so that we, as a party, can take a stance and voice our concerns on this issue in order to better influence the process of crafting the proposed ballot question.

Dru

Sorry for weighing in late in the game. Have only now had a chance to take a look at this. While a carbon tax in theory is a very good idea, there are several red flags buried in the CGE’s (Committee for a Green Economy’s) proposal that i find quite troubling. I wonder if others are aware of them, and if so, what your thoughts are.

1. The largest chunk of revenue – 50% – after $100 million in infrastructure (and science/research) expenditures is targeted for REDUCING CORPORATE TAXES. 25% will go to reducing income taxes. 25% will go to reducing the sales tax. Unless i’m missing something, this makes the bill EXTREMELY REGRESSIVE. It also creates the potential for a corporate boondoggle. A regressive bill (or a corporate boondoggle) would hurt the poor and middle class. And it would generate resentment against environmental legislation – making it harder to pass needed legislation in the future.

2. The $100 million in infrastructure (and research) expenditures is not specified, as far as i can tell. (Please shout out if you know more.) This leaves open the possibility the revenue will be channeled into highways, bio-tech, bio-fuels, clean coal, “safe fracking”, and other “green” projects the Democrats are good at inventing. Do we want to risk the misuse of carbon-tax revenue by supporting a proposal where key specifics (types of programs) have not yet been provided?

3. Other key details do not seem to be available – at least they are not on the proposal’s website (http://www.committeeforagreeneconomy.com/#!the-big-mission). This includes how much the carbon tax will be (dollars per ton), the rate it will be raised, how it will be applied. I can see going along with leadership we have long trusting relationships with – but we don’t have that here…. In fact what we have is a history of trojan horses and baby steps forward – while the planet is going down in flames. A referendum is a huge uphill battle. It’s important to be confident that what you’re fighting for is worth it, and you can trust the leadership team. I fear neither of those conditions are being met in the Committee for a Green Economy’s carbon tax referendum.

If there are sources of information i’m not aware of that change the picture of CGE’s proposal, i’d love to know about them. Thanks for any responses to these concerns. -jill

As a policy proposal in the abstract, we should be able to endorse a carbon tax. The Green Party already supports the carbon tax concept as a national policy. The platform reads:

Establish carbon taxes on fossil fuels, to reflect the environmental cost of their extraction and use. Carbon taxes should be applied as far upstream as possible, preferably when possession of the carbon-bearing fuel
passes from extraction (for example, coal mine; oil wellhead or tanker; gas wellhead) to the next entity in the supply chain (for example, coal shipper or utility; oil refiner or importer; natural gas pipeline). Offset potential regressivity for lower income individuals by cutting income taxes and/or other approaches. Carbon taxes are better than market-based policies because they lead to more predictable carbon pricing, are more transparent, take effect more quickly, and do not enable profiteering by the financial industry.

Further questions to be considered:
1) Is the regressive nature of the carbon tax adequately addressed?
2) Do we accept the “revenue neutral” provision? Some Greens insist that part of any carbon tax be spent on renewable energy.
3) Do the organizers have the resources to wage a very expensive statewide campaign? Getting voters to approve a new tax is almost impossible. Defeating the fossil fuel industry is always difficult. If the referendum is defeated, will it be viewed as voter rejection of the carbon tax concept?
4) Do the organizers have the political network needed to keep the Massachusetts Legislature from repealing the carbon tax? (Remember that the Legislature repealed Clean Elections despite the fact that it passed by a 2-1 margin.)
5) Are the organizers friendly toward the Green-Rainbow Party? This needs to be determined before we commit resources in support of the referendum.

Nearly revenue-neutral carbon tax studied for Massachusetts:
http://www.bostonglobe.com/opinion/columns/2013/07/06/massachusetts-should-pass-carbon-tax/i1ximZJ52jIUzfy4GfgiML/story.html

http://www.npr.org/blogs/money/2013/06/28/196355493/economists-have-a-one-page-solution-to-climate-change

The carbon tax potentially raises so much revenue that the money can be used to offset the hardship for consumers: “Besides reducing carbon emissions, a carbon tax brings in a bunch of money — it’s a tax after all. So, Reilly says, you can reduce, say, income tax to balance out the new taxes people are paying for carbon emissions. People pay more for gas, but they get to keep more of their income.”

“If you give the carbon-tax money back by cutting income taxes, you can probably offset a lot of the pain.”

Yes. Pragmatically speaking, it is untrue that the calculated use of violence (war) has never had positive results. Some wars of liberation have actually gotten rid of oppression that was replaced by greater opportunity for large populations.

So this is not a question of ends and means but rather a question of a distinctive political contribution that is the only true meaning of an alternative politics. For the sake of the GRP politics — it’s not a question of letting “the perfect be the enemy of good” but one of what the GRP stands for, not the perfect (pragmatic politics is not utopian) but that which actually, in practice serves the common good. Not the corporate good. (I never heard of corporate interests favoring a solution from which there is not more money to be made.) If we are to treat the matter aphoristically, we might remember that "the good is the worst enemy of the better.

I am not suggesting for a moment that the GRP oppose this idea. I am only pointing out that we should remain in a position to show why — even though it might be instituted — it will not work as needed. I can imagine why people might wish the GRP to protest the silencing of dissent together progressives. But that is very different from supporting a complex solution to and environmental problem in a manner that might be ecologically unsound, and even regressive in generating wasteful consumption and exacerbating existing disparities of income.

It is perfectly possible that if the model in the REMI study had included a number of other parameters, a far better result might have sold itself to the public even better than this one. Marketing is skewed. Lets stop being gullible.

Elie,

As a matter of practical politics, a revenue-neutral carbon tax is something that, however hard, may be able to find traction with a majority of Massachusetts voters. While I would also love a full internalization of the negative costs of carbon, it is not palatable to the majority, or to the industries that have the money to propagandize against it. Any ideal, therefore, may as well be inaction.

Carbon taxes produce a desirable market effect with little oversight. Regardless of what the revenue is used for (other than for further damage of the environment, etc.), the tax should be supported. Let not perfect be the enemy of good.

Hi Elie,

While it might be better for the climate to direct all new carbon tax revenues right to appropriate infrastructure, in general, revenue-neutral carbon tax-and-dividend proposals have been more widely accepted when considered by USA citizens at large in polls, I believe. This may be because of low trust in government. Be that as it may, I want to note that the first $100 million from this MA carbon tax is slated toward infrastructure and science, then the rest is divided in a revenue-neutral manner.
The REMI study found this 50:25:25% apportionment of revenues between corp taxes: Income taxes: and sales taxes met their criteria best, although their criteria are not ideal, using state GDP as a measure of value.
This is not an ideal carbon tax, but it exists, has momentum and for many reasons may be found acceptable to a broad swath of citizens from many political backgrounds.

Please explain why the revenue-neutral carbon tax is to be preferred to a use of revenue from carbon tax to further reduce energy waste and to improve infra-structure needed to cope with expected impacts of ongoing climate-change. I don’t get the point of avoiding the use of a revenue carbon tax to pay the expenses incurred under Environmental Full Cost Accounting. Qui bono? The hesitations expressed near the end of the model need more examination.

Dru, you beat me to it! Good to see this.

Additionally, more info on the initiative can be found at http://www.committeeforagreeneconomy.com/

I’m not sure that it’s all written out as is necessary for a proposal, so any structural changes are more than welcome.