Substituting a carbon tax for some of our current taxes — on payroll, on investment, on businesses and on workers — is a no-brainer. Why tax good things when you can tax bad things, like emissions? The idea has support from economists across the political spectrum, from Arthur B. Laffer and N. Gregory Mankiw on the right to Peter Orszag and Joseph E. Stiglitz on the left. That’s because economists know that a carbon tax swap can reduce the economic drag created by our current tax system and increase long-run growth by nudging the economy away from consumption and borrowing and toward saving and investment.
Amen to that. And for more carbon tax goodness, you should read the whole thing for yourself.
With Yoram’s help, Sightline has been advocating for a carbon tax shift for well over a decade. And for those who don’t know, British Columbia has already implemented one of the world’s best carbon tax shifts, inspired in part by our research. But unfortunately, the province has put further carbon tax shifts on hold, presumably waiting while the rest of the globe plays catch up. Which does raise a question: when are the Northwest states going to get serious about putting a price on carbon?