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Wednesday, February 07, 2007

My take on global warming and carbon taxes

My overall take on global warming is basically similar to instapundit's.

On carbon taxes: Lots of economists love the idea of carbon taxes, or at least higher gasoline taxes, but these sorts of "Pigovian taxes" are awful for the working poor. About the only way I'd ever support such a tax is if it's revenue-neutral and the tax is paid for by a front-loaded elimination of the "worker's share" of social security and Medicare taxes, up to the "revenue neutral" point. This would give the working poor a 7% raise without cost to their employers, and give them a chance to deal with the increase in the cost of living that these sorts of taxes would impose on them.

Some argue that the poor can always ride the bus, or move closer to work, but moving costs significant money, and many working poor don't have steady employment so it often isn't clear where they will work over time. They also often work several part-time jobs and need reliable transportation to get between them, so depending on public transit is difficult.

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