Read it here.
Here's the bit that's made some news and that seems like the most dramatic proposal. I'm not sure that I like it. Won't this make a major portion of the budget dependent on CO2 emissions? Is that really what we want? Also, what does this plan do the possibility of a lockbox? What do you think?
For the last fourteen years, I have advocated the elimination of all payroll taxes — including those for social security and unemployment compensation — and the replacement of that revenue in the form of pollution taxes — principally on CO2. The overall level of taxation would remain exactly the same. It would be, in other words, a revenue neutral tax swap. But, instead of discouraging businesses from hiring more employees, it would discourage business from producing more pollution.
Global warming pollution, indeed all pollution, is now described by economists as an “externality.” This absurd label means, in essence: we don’t to keep track of this stuff so let’s pretend it doesn’t exist.
And sure enough, when it’s not recognized in the marketplace, it does make it much easier for government, business, and all the rest of us to pretend that it doesn’t exist. But what we’re pretending doesn’t exist is the stuff that is destroying the habitability of the planet. We put 70 million tons of it into the atmosphere every 24 hours and the amount is increasing day by day. Penalizing pollution instead of penalizing employment will work to reduce that pollution.
When we place a more accurate value on the consequences of the choices we make, our choices get better. At present, when business has to pay more taxes in order to hire more people, it is discouraged from hiring more people. If we change that and discourage them from creating more pollution they will reduce their pollution. Our market economy can help us solve this problem if we send it the right signals and tell ourselves the truth about the economic impact of pollution.