Skeptics of Pigovian taxes on the right sometimes struggle that such taxes are expert inward regulation precisely inward practise the left volition co-opt them and, rather than using the revenue to cut back other taxes, volition purpose it to fund e'er larger government.
Sadly, that betoken of persuasion is getting roughly back upwards inward Washington state. The headline to a higher house from The Seattle Times reads 'Green' alliance opposes petition to taxation carbon. Why the opposition? Because the ballot mensurate is revenue-neutral. Some environmentalists want to purpose the revenue from the proposed carbon taxation to increment spending instead.
I believe that a carbon taxation could someday win bipartisan support. But earlier it does so, those on the left volition demand to convince those on the right that the taxation would last a taxation shift, non a taxation increase. The carbon taxation needs to last evaluated on its ain merits too should non last a stalking Equus caballus for a broader, big-government agenda.
Update: Responding to my post, John Whitehead writes, "The measure textbook handling of a Pigouvian taxation is agnostic on what happens to the revenue."
He is right, of course. So permit me clarify. I was trying to brand a betoken non near textbook economic science precisely near practical politics. Here are ii propositions:
1. The taxation organisation should last shifted inward a Pigovian direction.
2. Government should last larger.
These are largely unrelated claims. Logically, ane tin believe both, neither, or solely ane of them. In my view, it much easier to brand the illustration to many voters, specially those on the right, for suggestion 1 than for suggestion 2. As a result, if you strongly believe inward suggestion 1 too are trying to pose together a coalition to larn inward happen, marrying it to suggestion 2 is non the best move. Sumber https://gregmankiw.blogspot.com/
