You are here

Carbon Tax...Are Republicans Really That Stupid?

Citations

Title

Carbon Tax...Are Republicans Really That Stupid?

As my respected friend Marlo Lewis at the Competitive Enterprise Institute cogently points out, economic arguments that government should tax “bads”, like CO2 emissions, rather than “goods”, like labor and capital, reflect sloppy thinking. “In technical economic terms, only finished products and services are ‘goods’. Labor and capital are inputs, production factors or costs.”  Here, energy is a key input without which most labor and capital would be idle or non-existent. And since about 83% of U.S. energy comes from carbon-based fuels, a carbon tax also taxes what economists loosely call “goods”. Lewis refers to this as “free- lunch economics…a recipe for failure or worse.”

Carbon Tax...Are Republicans Really That Stupid?