Huge Tax Increase?

Jim Manzi responds to me at the Corner. It seems that another way that the GOP will try to win on this issue is by painting carbon pricing as a massive tax increase. This is just dishonest, though politically it’s their best bet (assuming a complete lack of regard for actual outcomes). Let’s all think back to the Lieberman-Warner debate, when Bush did his best to scare the crap out of everyone by arguing that L-W would increase gas prices 53 cents per gallon–by 2030. In fact, it’s difficult to imagine that the increased energy costs associated with cap and trade will be anywhere near as painful as the rise in gas prices has been.

That doesn’t mean the public will love the idea of carbon pricing. Democrats will be able to argue, however, that energy prices are going to go up regardless, but that with cap and trade part of the money from the extra expense goes to the government rather than the sovereign wealth funds of Gulf nations, and at least some of those proceeds can be used to assist consumers with the additional cost burden.

Manzi notes that whatever energy prices are, they’ll be less without pricing. Ok, fine. But the alternatives are that Republicans are honest about the expected potential energy price increases, which are then unlikely to be scary to voters (and which will also represent, in part, a simple diversion of money from energy producers, including oil exporters, to the treasury, and thence in part to voters). Or Republicans can be dishonest about the expected price increases. But why would they be, except to try an improve their electoral fortunes? And is that really worth the downside? And Republicans can say or do whatever they want, but gas will never again be $1.50 a gallon. Electricity, under the best of circumstances, isn’t going to get cheaper.

And once it’s clear that the resulting price increases from cap and trade will not, in fact, be massive, the GOP is left to argue that pricing, “will never create present value of benefits greater than costs.” That’s not correct, but even if it were, it makes a pretty poor rallying cry.

Manzi also thinks I’m wrong to suggest that scary headlines are going to have an impact. I strongly beg to differ. This is how people think, and this is how the media works. Now I think it’s clear that the weather is going to get freakier and more economically devastating, in a steady fashion. It’s true that not every 500 year flood in some part of the country is attributable to warming. But some are, and so all anomalies will frighten people. And noise machine or no, the GOP will ultimately find themselves asking people, who are you going to believe, me or your lying eyes?

The sad thing is, this isn’t a political battle. I don’t want the GOP to lose this because they’re the GOP. I want them to lose this issue because they’re wrong. And so one thing Democrats need to work at is finding ways to help the GOP win on this issue with Democratic policies. Because if stupid partisanship pushes Republican politicians into contrarianism and misinformation, all for the sake of winning, then we’re all in trouble.

But to repeat: this is not a massive tax increase. It’s just not.


2 Responses to “Huge Tax Increase?”

  1. hapa Says:

    i don’t see this crop of discount-the-danger fools switching from arson to altruism because of community outreach. what if the choice is between them wandering in the desert for a while, or all of us?

    they’re a fire hazard….

  2. ramster Says:

    How’s this for a huge tax increase? Imagine if the price of oil went up by $100 per barrel over just 5 years. Given that the US consumes about 20 million barrels per day, the US would be spending 730 billion dollars per year more than before the price increase. Now that’s a big tax increase. Oh shit…it’s not imaginary; it’s happening now.

    That’s the part I never get. Manzi et al seem to keep wetting their pants over the economy destroying implications of carbon taxes yet their sanguine about the impact of high oil prices. The worst part is that the carbon taxes can be re-cycled back into the domestic economy whereas spending on oil goes overseas.

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