Capital Commerce

Carbon Tax? Cap and Trade? How About Both?

By James Pethokoukis

Posted: May 23, 2008

Conservatives always fret that if we instituted a replacement for the income tax, like the Fair Tax, without repealing the federal income tax, eventually we would end up with both. I couldn't help thinking about that when I saw this article on the fine WorldChanging site that addresses the issue of whether it's better to have an expensive cap-and-trade system to deal with carbon emissions or an expensive carbon tax. Hey, why not both! Hoo-boy...

"The good news is that with careful policy design, Cap and Tax can be better than either Cap or Tax. The Tax toughens the Cap, the way steel rebar strengthens concrete. The bad news is that without careful design, the two could weaken each other."

Trying to "design" a policy is what gets governments in all types of trouble in the first place. However, I digress.

Chris of AZ @ May 24, 2008 20:55:00 PM

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Capital Commerce

Capital Commerce

U.S. News business reporter Matthew Bandyk examines the issues, people, and debates that shape the nexus of political and economic life in the nation's capital.

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