Monthly Archives: February 2017

Carbon and Taxes

There are a number of ways to raise money to pay for the various and sundry functions of government. Here in the United States we use many different taxes. At the local level, say county and city, the emphasis seems to be on real and personal property taxes and sales taxes. At the federal level income taxes predominate. There are many variations on these taxes such as luxury taxes, estate taxes, capital gains taxes and special exceptions, i.e, tax deductions, but a common theme runs through them all. In addition to raising money for the operation of the government, taxes are aimed a social policy.

Progressive income tax rates, dependent allowance for income taxes, sales tax exemptions for food and drugs, deductions for mortgage interest and child care to name just a few. The result of all this is a rather arcane web of taxes that keep certified public accounts and tax lawyers in the the tall cotton. It could be simpler, for example we could get rid of all deductions and exemptions.

Much of Europe uses a VAT or Value Added Tax. Basically this is a sales tax on the increased value of an item. Iron ore is minded to make steel, which is used to make pipe, which is used to lay an natural gas line. At each point the value of the product increases and that increased value is taxed. A similar tax has been proposed in the US called a “fair tax.” This is a 30 % tax on sales of goods and services. The rate is set to be revenue neutral, that is it would replace other taxes but neither increase or decrease net revenue.

The flaw with any tax is that it punishes some activity. Some are intentional such as sin taxes, those on the sale of tobacco and alcohol, but others aren’t meant to punish but do just the same. Income taxes punish income (work), sales taxes punish sales (business), and capital gains taxes punish savings.

We have to collect taxes and that collection inherently punishes some activity. An alternative promoted by environmentalists is a pollution tax. The tax rate could be calculated to be income neutral, and the tax rate of a polluting activity could be based on the importance of the pollutant. The most mature of these pollution taxes is called a carbon tax, actually a tax on Carbon Dioxide released on combustion of fossil fuels. Over ninety per cent of of fossil fuels go to the generation of energy (do work), the remainder being used for the manufacture of plastic bags and axle grease.

The carbon tax would embed an additional cost for heating your home, fueling your car (and the trucks and trains that move the goods across the country,) and keep the lights on in your home, as long as this work was done via fossil fuels.

An most important added value of this form of taxation is the favoring of clean energy production. Solar, wind, and geothermal processes do produce useful work but don’t pollute so wouldn’t be taxed. This would greatly stimulate the adoption of sustainable energy for our future.

The Travel Ban

During the presidential campaign Donald Trump made a point of excoriating Muslims. In December 2015 he called for “a total and complete shutdown of Muslims entering the United States until our country’s representatives can figure out what is going on.” This Muslim ban was talked up throughout his campaign and even after his election but before the inauguration.

It is not surprising then that he acted on the proposition. His initial action was a blanket ban on all travelers from seven middle eastern countries: Syria, Iraq, Iran, Yemen, Sudan, Libya, and Somalia. The ban was initially without exception, even for those who already had valid visas or green cards. The justification of the ban is based on protecting our citizens from terrorists. It is important to note that not a single terrorist attack has occurred in the United States by a citizen of any of the aforementioned countries. Not one.

The travel ban did not include several countries in the middle east whose citizens have committed terrorist acts, including the deadliest attack on American soil, the hijacking of planes and their subsequent suicidal attacks on the twin towers in New York and the pentagon in Washington, DC. These hijackers hailed from Saudi Arabia, The United Arab Emirates, Egypt, and Lebanon, none of which are on the travel ban list.

The ultimate question is will this action really make us safer? As noted the travel ban was not on all Muslims, but on all citizens from a select group of predominantly Muslim countries, so strictly speaking it was not a Muslim ban. In politics however, perception is reality. Trump spoke of a Muslim ban but banned everyone from Muslim countries. This will be perceived by many as the Muslim ban that he flogged repeatedly.

There are close to 2 billion followers of Islam worldwide and most of them are neither in the middle east or have anything to do with terrorism, yet. The Muslims in the banned countries represent only 12 percent of all Muslims, yet all Muslims have been insulted by this action. It is easy to see how this could be used as a recruitment tool for groups such as ISIS and Al Queda. Will the ban make us less safe?

What we get with this travel ban is a further polarization of attitudes of our citizens, a questionable change in the likelihood of terrorism on our soil and an image to the international community that grows darker by the day.

The United States has been a beacon of hope and promise for the disenfranchised around the world. After all, we are in the main an immigrant nation. Our success as the world leader depends to some degree on perceptions of us as a free and open society.

Hottest Year Ever

Drum roll please, and the hottest year in recorded history is…wait for it… 2016! Actually this is not so surprising. The previously hottest year in history was 2015, and the next hottest before that 2014. If you think you see a trend there you do.

With the exception of 1998, the 15 hottest years ever occurred in this century. 2016 was 2 degrees hotter than the average of the 20th century. In contrast the last recorded coldest year was in 1911, over a century ago. These records have been recorded in the troposphere, the atmospheric layer closest to the ground. Sea surface temperature measurements are congruent.

The culprits for the heating are anthropogenically generated (man- made) releases of green house gases to the atmosphere. Carbon Dioxide causes over half of the radiative forcing so it is the major player but Methane, otherwise known as natural gas is a close second. The concentration of Methane in the atmosphere has recently been spiking and the likely source is fugitive emissions from fracking.

The new president has claimed that his EPA will “protect the environment and human health”; however, he has on numerous occasions called global warming a hoax. He has claimed that because it is cold outside (in the winter of course) that global warming doesn’t exist. He has claimed that the overwhelming scientific consensus is driven by climate scientists profiting from their research. The only thing making any sense here is that he would see money as the driver for any research outcome.

It’s not just the scientists here in the USA, every scientific body on earth that has addressed the issue agrees, global warming is real and a threat to both the environment and human health. This bears repeating: No scientific body of national or international standing holds a formal opinion denying the reality of global warming.

The actions so far in the new presidency seem to reinforce his prior proclamations. His selection to head the EPA is Scott Pruitt, Oklahoma’s Attorney General. Attorney General Pruitt has sued the EPA over numerous regulations designed to clean our air and water. He has begrudgingly accepted that it is getting warmer, but questions humanity’s responsibility. Further he questions what if anything we should be doing.

Rick Perry, former governor of Texas and the selection to head the Department of Energy is similarly poorly informed on climate science. Perry has recently softened his stance. Previously he claimed the science of global warming was a “contrived phony mess.” Now he thinks it’s real but efforts to combat it should not cost American jobs. Study after study has shown that there are many more jobs created with sustainable energy over continuing to exploit fossil fuels.
Regulations in the sights of the president include previous efforts of several presidents going back to Jimmy Carter. Look for lifting of the transportation fuel efficiency standards, blocking the clean power plan to regulate power plant emissions, and reduced restrictions on coal mining and use.

Preventing additional accumulation of greenhouse gasses in the atmosphere is a zero sum game. You either add or you don’t. Utilizing fossil fuels adds, using sustainable energy supplies such as wind and solar don’t.