The tax that could save the world
Most economists agree on how to tackle climate change. Can politicians make it happen?
By Michael Maiello & Natasha Gural – It was, perhaps, the closest that the economics profession has ever come to a consensus. In January, 43 of the world’s most eminent economists signed a statement published in the Wall Street Journal calling for a US carbon tax. The list included 27 Nobel laureates, four former chairs of the Federal Reserve, and nearly every former chair of the Council of Economic Advisers since the 1970s, both Republican and Democratic.
“By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future,” the economists noted. All revenue from the tax should be paid in equal lump-sum rebates directly to US citizens, they added.
Not all economists agree that the tax should be revenue neutral in this way, but the profession has been coalescing in recent years around the idea of a carbon tax. Most prefer such a tax to the most prominent alternative policy for tackling carbon emissions, cap and trade, according to a recent poll of expert economists.
But a carbon tax seems to be a political nonstarter in the United States. The bipartisan call for action from economists over the years has been echoed by a failure to act by presidents from both parties. President Donald Trump denies the need to confront man-made climate change. But although Barack Obama, his predecessor, in 2015 called a carbon tax “the most elegant way” to fight global warming, he didn’t push strongly for one to be introduced. “One of my very, very few disappointments in Obama when he was president is that he did not come out in favor of carbon tax,” Yale’s William D. Nordhaus told the New York Times last October, days after winning the 2018 Nobel Prize in Economic Sciences for his work on economic modeling and climate change.
US states have shown that they, too, can reject a carbon tax. more>
Posted in Business, Economy, Education, Energy & emissions, History, How to, Nature, Science, Technology
Tagged Business improvement, Capital, Chicago Booth, Climate change, Skills, Taxes
Taxing Wars: The American Way of War Finance and the Decline of Democracy, Author: Sarah Kreps.
By Sarah Kreps – What explains the American tolerance for such open-ended, seemingly never-ending wars?
One view is that the light footprint of modern warfare — drones, small numbers of special forces, and cyber, as opposed to large deployments of troops — is a chief culprit. This approach to conflict removes a barrier to war because it does not inflict casualties on American troops that would draw attention to and drain support for the enterprise.
This is surely a contributing factor. But I argue that the most crucial difference between these wars and those of the past is how they have been financed.
Contemporary wars are all put on the nation’s credit card, and that eliminates a critical accountability link between the populace and the conduct of war.
But without war taxes, the country is left with mounting debt — and left, too, with wars without accountability. If the public fails to experience the “inconvenience” of taxes, paraphrasing Adam Smith, there is no incentive for voters to push for a course correction.
When no citizen feels a financial pinch during wartime, open-ended wars like those in Afghanistan and Iraq are likely to become the norm, not the exception. more>
Source: To stop endless war, raise taxes – Vox
Posted in Book review, CONGRESS WATCH, Economy, Education, History, Leadership, Media, Net, Technology
Tagged Business improvement, Congress Watch, Endless war, Government, Leadership, Taxes, Technology, United States
Why it’s so hard to simplify the tax code
By Dee Gill – Simplifying the tax code ostensibly has bipartisan backing. Both the Bush and Obama administrations advocated for simplification, in reports, as have House Speaker Paul Ryan (Republican of Wisconsin) and Senator Elizabeth Warren (Democrat of Massachusetts). But when the Senate passed a tax bill this past December, there was no postcard.
What happened? The same thing that always does, suggest researchers. While simplicity is a stated goal, complexity wins the day. Hence companies and individuals will hire accountants to wade through the latest bill, interpret the new rules, offer guidance, and help work through the inevitable corrections and amendments.
And this comes at an economic cost. Research by James Mahon and Chicago Booth’s Eric Zwick, and others, collectively indicates that the complexity leads individuals and companies to fail to take advantage of billions of dollars in offered breaks, many of them presumably intended to stimulate the economy. In this way, complexity undermines what tax incentives are purported to accomplish. more>
Posted in Business, CONGRESS WATCH, Economy, History, Media, Regulations
Tagged Chicago Booth, Complexity, Inequality, refunds, Tax deduction, Taxes
Why we should teach people how to lie
By Chana R. Schoenberger – Could you handle being honest—totally, brutally truthful, without even a well-intentioned falsehood to smooth over a social situation—for three days?
Most people don’t think they could, at least not without ruining their family, social, and work lives. Fibs, white lies, and half-truths (along with, perhaps, more egregious whoppers) are such an important part of our interpersonal tool kit that going without them seems next to impossible.
But Chicago Booth’s Emma Levine, along with Carnegie Mellon’s Taya R. Cohen, asked exactly that of a group of research subjects and came away with a surprising conclusion: it’s not as bad as it sounds.
The researchers asked some participants to be completely honest in every interaction, with every person in their lives, for three days, while other participants were asked simply to be kind or conscious of their words. The participants predicted that being forced into honesty would make them unhappier than if they had to be kind or just aware of what they were saying to others. They anticipated frayed relationships as a result of abandoning the lies they typically use to cover up awkward or uncomfortable situations.
But being honest didn’t torpedo subjects’ friendships, family connections, or jobs.
“The experience of being honest is far more pleasurable, leads to greater levels of social connection, and does less relational harm than individuals expect,” Levine and Cohen write. more>
By Andrew Soergel – As recently as Wednesday, President Donald Trump was quoted during a Cabinet meeting as saying he sees “no reason why we don’t go to 4 percent, 5 percent and even 6 percent” gross domestic product expansion in the months and years ahead.
Economists have broadly doubted these claims – though few quibble with the idea that the GOP-constructed tax plan would have a modestly positive impact on markets and the economy over the near term. Analyses from the Joint Committee on Taxation, the Tax Policy Center and the University of Pennsylvania’s Wharton Budget Model have all predicted a final bill, in a best case scenario, would add a few fractions of a percentage point to the country’s GDP growth rate over the course of the next 10 years.
A growing number of experts are using the term “sugar high” to describe what the tax bill is likely to do to the U.S. economy – provide some short-term energy for growth before petering out or, even worse, pushing the country toward a crash. more>