Unfortunately, consumption taxes are always regressive, and a carbon tax would be no different. Even if you happened to receive more from a carbon dividend than you would pay in carbon taxes, you would "pay" for it by having to sacrifice goods and services that you otherwise would have consumed. I do support a carbon tax, but I think it's important to be realistic about its effects if we want it to be politically sustainable.
Only if you are currently emitting more than the post-tax average emission. If you are already below average, you can emit the same amount and get paid.
Poor people are generally emitting well below the average currently. They take fewer flights, have smaller houses and buy less stuff in general. With current levels of emissions, they would be getting paid without reducing emissions at all.
Eventually after the rest of society reduces emissions, they might have to reduce emissions, but that would only be after the rest of society sacrifices much more consumption.
>Only if you are currently emitting more than the post-tax average emission. If you are already below average, you can emit the same amount and get paid.
You need to consider the downstream effects of the tax. The oil can only get taxed once, but the effects are compounded throughout the entire economy. For example, truck drivers would see dramatically increased expenses. For examples, truck drivers would have to pass on the cost of the fuel to transport freight. Meanwhile, other drivers will be forced to quit, which reduces our total freight throughput, which makes shipping even more expensive.
This is a description of the system working. Both outcomes are cheaper for the customer.
Either the customer pays the retailer who pays the truck driver with the exact money the truck driver paid, or the customer does something cheaper and there is more money to go around because the customer is not paying for all the harms trucking does (including their kid's asthma bills and several dollars per gallon in road upkeep).
Drivers would quit? Why wouldn't they raise their prices? Truck transport is an irreplaceable step in every company's sale of goods to another person or company. Well, a couple might be able to switch to trains, but they'd be the minority.
The only way demand for freight transport would go down is by reducing inefficient dead space in product packaging - ie exactly the type of efficiency improvement we would want from a tax.
If the money in is proportional to carbon, and the money out gets distributed perfectly evenly by population then the net result is progressive.
The only way that can not be true is if emissions scale up faster than income scales down or if we listen to people citing fake concern for the poor to enact a means testing program that redirects 90% of the money to serco and other cronies for enforcement.
>If the money in is proportional to carbon, and the money out gets distributed perfectly evenly by population then the net result is progressive.
Monetarily, sure, but in practice the effect would feel regressive because income scales more faster than emissions. Someone who is 1000x richer than average isn't going to live in 1000 houses, eat 1000x more beef, or drive 1000 cars simultaneously. This means that they're in a much better position to simply eat the cost of a carbon tax while the poor and middle class will actually have to make the sacrifices to reduce emissions by carpooling, turning the heat down in winter, etc.
The rich person will also receive a much smaller portion of their income in the rebate (and then pay 1000x the poor person for their flights and to fuel their yacht, and 100x to cool their house with glass walls and run their pool, etc etc).
The tax is mildly regressive and the rebate is extremely progressive. The poor person who makes all those lifestyle changes in response to the tax is much better off than they were as the upper bound on their contribution sans rebate is less than what they were paying to begin with.
So stop your fake concern for the poor who would have more options, and more spare cash.
>So stop your fake concern for the poor who would have more options, and more spare cash.
They would have fewer options. They already have the choice to reduce to emissions without a carbon tax, and now they have financial pressure to go down that path.
And no, it's not "fake concern". As I've said many times, I'm pro carbon tax. I'm explaining the real economic factors that make the carbon tax politically infeasible. All it takes is a particularly cold month in the north, where people are far more reliant natural gas heating, for the pro-carbon tax camp to completely burn all their political capital for the next hundred years.
If you have $200 in your pocket for heating and natural gas heating costs $190 (because you have an equal share if the rebate but a smaller than equal share of the tax burden), you're far better off than if you have $100 in your pocket and it costs $100. If there are other options that cost $150, you now have the freedom to choose them when previously your only choice was gas.
So rich people give a bunch of money to poor people, but that's regressive because the rich people don't notice it very much?
The poor don't have to sacrifice anything unless the average carbon emissions drop to below what the poor are currently consuming. Until that happens, the poor can continue to emit whatever they currently do and get paid for the fact that they don't consume more.
