U.S. carbon tax could halve deficit in 10 years: report

Yahoo ^

[Sub-Driver]

U.S. carbon tax could halve deficit in 10 years: report Reuters – 2 hrs 10 mins ago

WAHSINGTON, Sept 26 (Reuters Point Carbon) - Imposing a $20 per metric ton carbon tax in the U.S. could reduce the country's budget deficit by 50 percent over the next 10 years, a report by the Congressional Research Service said on Tuesday.

Such a tax would generate approximately $88 billion in 2012, rising to $144 billion by 2020, the report said, slashing U.S. debt by between 12 and 50 percent within a decade, depending on how high the deficit climbs

The U.S. budget deficit has exceeded $1 trillion annually in each fiscal year since 2009, and could rise to between $2.3 trillion and $10 trillion by 2020, according to the Congressional Budget Office (CBO).

Since deficits can lead to reduced savings, higher interest rates and higher levels of inflation, reducing them is a high-priority issue in Washington.

The concept of using a carbon tax to combat the problem has been floated in Congress this year, but it comes with many potential downsides, the report added.

For example, households would face higher energy bills because utilities forced to pay the tax would likely pass the costs onto consumers.

"Lower-income households, in particular, would face a disproportionate impact if revenues were not recycled back to them in some fashion," the report said.

[CSM]

“Lower-income households, in particular, would face a disproportionate impact if revenues were not recycled back to them in some fashion,” the report said.”

That’s a pretty fancy way of saying: From each according to his ability, to each according to his need.

Of course, the report assumes that there will be no future spending increases.

[Wildbill22]

Wouldn’t this be ‘raising taxes on the middle class’?

And wouldn’t it hurt the poor and struggling disproportionally?

And of course, the premise on which Carbon taxation is based is fraudulent (Global Warming).

Of course the case could be made that soon, only the rich will have cars to tax carbon on, and we will all be using firewood to heat our homes, but then they might carbon tax that as well...

[arthurus]

Having read and uabsorbed long ago Henry Hazlitt's short book Economics in One Lesson I immediately understand that a carbon tax would not decrease the government deficit and would decrease revenue to government by decreasing economic activity to the extent that the carbon tax would result in smaller revenue overall to the government and an increasing Deficit, given no concomitant reduction in spending (does anyone think there would ever be a reduction in spending?).

[arthurus]

Lìberalism is a path to total power. Power is incomplete i.e. not total if there are competing sources of power in a society. Wealth beyond an ability to barely feed one’s self and family is such a source of power. It is not a mental disorder though it is amoral and ethical disorder of the gravest sort. Power is a natural ambition of human beings. The Free Market and Religion (Judeo-Christian based, primarily) is defense against total power seeking.

[arthurus]

205 higher revenue begets at least enough higher expenditure to account for 150% of the additional revenue. That seems to be a political Law.

[mojito]

Hey! I’ve got a great idea!

Let’s tax gasoline at $5 a gallon!

It’ll reduced the deficit by half in two years!

Whoopee!

[Sir Napsalot]

>>> Their math doesn’t even add up. Since when is $122 Billion half of $1 Trillion?

Note in the article: "Such a tax would generate approximately $88 billion in 2012, rising to $144 billion by 2020, the report said, slashing U.S. debt by between 12 and 50 percent within a decade, depending on how high the deficit climbs."

THEY've done their math, by 2020 when carbon tax reaches $144 billion, it will be half of the US Debt. Along with the completely wrecked economy.

But that would not be our biggest problem in that situation then, would it?