Tax income or tax carbon?

My feeling about the income tax is that since we aren’t making it work after all this time (double Dutch sandwiches, tax havens, carried interest, the facially unconstitutional minister of the Gospel rule of Code section 107), I’d rather study something else.

Carbon is trivially easy to measure and remarkably easy to detect.  But a carbon tax would bring plenty of problems beyond increasing energy prices and creating losers.  We’d have to have a substitute or proxy tax (like the section 4371 on premiums paid to foreign insurers) on foreign producers who would manufacture without the burden of such a tax, and it would be regressive.  Still, taxing what we want to discourage makes more sense than taxing what we want to encourage.  Taxing carbon will be tricky, but it ought to be studied.


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