Is Turnbull promoting a progressive carbon cost?

Income tax is progressive in that higher levels of income attract a higher marginal rate of tax. As best I can understand the alternate emissions trading scheme analysed by Frontier Economics and now being touted as an alternative by the Liberal Party leader it seems to do something similar. So for each kWhr of electricity the rate of tax on emissions would be increase as the assocate emissions increase. Emissions below some baseline amount would essentially be tax free. Whilst those above the baseline amount would be subject to the cost of purchasing emissions permits. In essence it seems to be a sort of progressive carbon tax.

The idea seems innovative and is promoted as being cheaper and hence better in economic terms. It is also being promoted as greener with the capacity to deter more emissions than the governments proposal. And it is claimed it would reduce churn. I have little idea as to whether any of this is true or not.

For those that are interested you can find the full report here:-

https://promo-manager.server-secure.com/download/files/01562/136541/Frontier+Economics+CPRS+report+-+STC+v2.pdf

9 thoughts on “Is Turnbull promoting a progressive carbon cost?

  1. Everyone here knows that zero taxes are the only optimal solution- to anything! Since we don’t yet live in that optimal world, we might be pragmatic, and realise that the Libs will probably feel compelled to pass some sort of ETS, or give Rudd a double-dissolution trigger.
    Is there anything we can suggest that is libertarian?

  2. I believe in low taxes. I don’t personally think zero taxes is optimal. Neither do I think it defines libertarian. Zero tax is more of an anarchist position.

  3. Actually, zero tax is more compatible with minarchism than with anarchism. A minarchist system could function with zero tax, having government activities funded through fees, the revenues from endowments, etc. (“the King should live off his own” idea of Civil War days). Anarchism is compatible with no taxes but not with zero tax – a subtle difference, but one that goes to the heart of it (also think VAT/GST exempt as against zero rated). Zero tax implies that taxes are appropriate but contends that the appropriate level is zero; it concedes the philosophical point, the principle, so opening the way for other levels under different circumstances.

  4. It doesn’t negate the philosophical point, because it is only asserting a current set of desired policy settings. Implicitly, it concedes the principle that there should be a tax policy which can properly be set to zero – and so, at other levels under other circumstances.

  5. Let’s ask others to comment. Who thinks that ‘Zero taxes are the only optimal solution- to anything’, is an affirmation against any tax, any time; or thinks that it is a deep philosophical endorsement of the principle of taxation? (I think of myself as a minarchist, by the way, but I am against any taxes.)

  6. Hang on! It’s overstating to put “deep philosophical endorsement”. Rather, it’s abandoning the principle – a concession – not endorsing the opposite of the principle. It leaves it open for people to come along later with a non-zero tax without contradiction or inconsistency, it does not affirm anything for non-zero tax (or against it, in principle, just against it under the circumstances then obtaining – which was my point).

  7. Your splitting hairs PML. Maybe those hairs look nicer after splitting but I wouldn’t get too excited about the benefits.

  8. The ETS is just another tax scheme by politicians and bureaucrats to take more money from private individuals while at the same time promoting cartelization of the energy industry by creating competition barriers. For years around the world the natural gas industry has been trying to take away market share from coal. The problem is the cost of conversion and the cost of the energy. Industry has never seen the cost benefit hence the climate change story and the need for carbon taxes promoted by the power brokers. Australia is becoming a major natural gas producer which with LNG allows this energy form to be shipped to China, India and other parts of the world (BHP has been attempting to get approval for an LNG terminal in California for several years now). So naturally Big Oil (which within the last 30 years has come to mean big natural gas also) has the ear of any government at the expense of the coal industry unless it can come up with clean coal or coal gas methane as viable alternatives. The answer is no new taxes and no taxes period. Why? Giving politicians and bureaucrats money is like giving money for kids to shop in a candy store – their demand is never satisfied. Government is merely the instrument by which the ruling elite use the public’s money to get special advantages they could never get in a private marketplace. Politicians and bureaucrats are merely power brokers whose services are sold to the highest bidder. The power is used for the purposes of theft (stealing the wealth of individuals), murder (war) and destruction of property (war). Government is life at the point of a gun. Resist any government order to the ultimate degree no matter how minor and you will soon be facing a gun when the police are ultimately sent to take you away.

Comments are closed.