Comments on: McCain reveals cynicism, hypocrisy with call for summer gas-tax holiday, energy budget freeze

By: Paul K

Paul K — Tue, 15 Apr 2008 16:16:36 +0000

Joe,
You have correctly said taxation is not the way to get to your desired carbon price. Your criticism of McCain is spin. I’m interested in seeing your post on regressivity. I hope your argument will be base on more than one contrarian speculative working paper. Note that NBER Working Papers have not undergone the review accorded official NBER publications; in particular, they have not been submitted for approval by the Board of directors.

[JR: I switched references now that I finished the second post. So NBER reference no longer valid.]

By: Joe

Joe — Tue, 15 Apr 2008 17:18:52 +0000

“Contrarian” is the wrong word, as you’ll see.

The criticism is not spin. His full proposal is cynical and hypocritical for someone claiming to care about oil consumption and global — and the economy, for that matter.

By: Jonathan

Jonathan — Wed, 16 Apr 2008 06:34:12 +0000

“Trillion Dollar Bush Tax cuts for the wealthy”??

Hmm. According to the Congressional Budget Office, the rich have been paying more taxes as a result of the Bush tax cuts and the middle class paying less. Here are the figures for Total Federal Income Liability for the upper quintile for the years 1997, 2000, 2003, and 2005: 78.2%, 81.2%, 84.8 % and 86.3%. For the middle quintile: 7.2%, 5.7%, 4.7%, and 4.4%. Even the 4th quintile saw a reduction from 18.3% in 1997 to 13.1% in 2005.

Who’s paying their fair share when the top 20% income level pays 86% of the income tax? (and no, I am not in that bracket)

By: Peter Wood

Peter Wood — Wed, 16 Apr 2008 13:22:32 +0000

For a carbon price (whatever form it takes) to be the most effective, it should cover as much of the economy as possible. What McCain is suggesting is the burden of greenhouse gas reduction should be shifted away from the transport sector. But if McCain wanted to reduce the cost of greenhouse gas emission reductions for the transport sector (for whatever perverse reason), he could have done that in other ways that would not have eliminated the incentive to reduce greenhouse gas emissions like his incentive does.

Your comments on McCains macroeconomic policies also seem to suggest that McCain or his advisors have a poor understanding of economics. Unfortunately it seems like this poor understanding may lead to poor greenhouse gas emission reduction strategies, if any.

On the subject of regressiveness, if a carbon price is high enough, there will be regressive impacts. The correct way to address this is by the tax and social security systems more progressive, not by eliminating incentives to reduce greenhouse gas emissions.