Matt Yglesias makes a nearly bulletproof policy argument for carbon taxes and then wonders why they’re so unpopular with Democrats:
Last but by no means least the government still needs revenue. It needs revenue to fund these solar subsidies, it needs revenue to pay teachers and cops, it needs revenue to fund Medicare and Medicaid, it needs revenue. There’s room for some kind of conservatives-for-solar-subsidies movement, but the vast majority of the people to whom these clean-energy causes appeal are the very same people who think the federal government’s tax revenue should rise. That’s a hard political fight right there. Why not make it a fight for a form of revenue increases that also have huge environmental benefits?
Mr. Yglesias is probably asking that rhetorically, but what the government does with the revenue is in fact the crux of the problem.
A tax on fossil fuel use is a regressive tax that will hit working class people especially hard. Now, it’s possible to construct the program to neutralize the impact on the poorest people, by allocating the funds to welfare programs, or even something as simple as cap and dividend.* But if one is looking to fund general government with carbon taxes, one is arguing to make the tax system more regressive.
Personally, I’d argue that given the scale of the threat, and the fact that nothing is going to deter destructive behavior more than making it expensive, that this is a reasonable price to pay. And the impact on the poor wouldn’t have to be as high with decent transit and land use policy. But it’s not surprising that the Democratic Party hasn’t pushed very hard for something that would shatter its coalition.
* As supported by Washington’s own Sen. Cantwell.