Seattle Times editorial receives a failing grade.
Richard Zerbe is Daniel J. Evans Professor Emeritus at the University of Washington
The Times’ editorials sometimes remind me of those of my students who believed but did not analyze, who wish, as so many of our politicians do, to have their own facts. Such students think (maybe) about an issue, decide where they stand and then collect arguments and information to support their already made decision. Of course a good student will study the issue and attempt to determine an answer or opinion from data and facts. To determine the better answer requires study.
A case in point is the recent “reject carbon-tax idea” editorial. I have not studied the issue in great depth but the Times arguments are quite flawed. Consider the editors’ arguments in order:
1. We are already reducing carbon emissions so the tax is not needed.
Why not? The question is whether we should reduce emissions more or replace current efforts by a carbon tax. The Times then does not ask or answer the relevant question. Moreover, in general, economic theory and experience suggest the taxes and/or cap and trade are superior in reducing “bads” such a carbon emissions to such other measures we are now taking.
2. The time is not right: The proposed carbon tax would make tax reform more complicated.
Why? IF not now when?
3. The tax would place a financial burden on residents.
This logic would suggest we should eliminate all taxes. This is what taxes do, raise money for a hopefully desirable end, for the social good.
4. Only Washington’s poorest 10% would get the tax rebate associated with the tax proposal.
Doesn’t this sound like a good thing?
5. The carbon tax starting at 1% would increase annually at 3.5% plus inflation but the associated sales tax burden would only be reduced by 1% and not change.
What is your point? This sounds startling as some will read it as in the tax going to 3.5 % or 4.5 % in a single year. This is not the case as a 1% tax that increases by 3.5% per year would be at only 1.4% in 10 years. This does not sound extreme. A better way to consider this is to look at the tax per ton on carbon emission.
The carbon tax would be $25 per metric ton on July 1, 2018. From there it would increase to by 3.5% per year in real dollars. This would give a tax of about $35 per metric ton in 10 years and a tax of about $50 per metric ton in 20 years. In 134 years the tax would have risen to $100 per metric ton. If this is higher than needed, it can be lowered. Yet, at even a 1% growth rate per year we would be four times as rich as we are now so the tax would not be any more of a burden than it will be now.
6. The tax is modelled upon the BC tax and emissions in B.C. increased in recent years, suggesting the tax doesn’t work as promised.”
This is nonsense. The first full year of the B.C. tax was 2009. To point out that emissions have increased since then is equivalent to saying that the sales tax didn’t stop economic growth. All this shows is that the B.C. economy has increased since the great recession such that it used more energy and thus emitted more carbon. The relevant comparison is what would have been the increase in emissions without the tax.