Quote:
Originally Posted by dmacc
If we all get our money back then why tax us on it in the first place?
You are right, government regulation on industry would be passed on to consumers, but so will this carbon tax. So implementing it as a tax shows me that the government just wants to profit off of it. Tax incentives result in the government agreeing to take less of your money if you show you are spending your money in a sustainable way. The government doesn't give you money, they just tax you less.
|
Because even though you get money back, the tax on pollution will affect the price of those goods, which will affect your decision at the margin. So while you may have received $180 to $340 back in this year's tax return in anticipation of the additional costs you will pay over the next year brought about by the carbon tax, you will still experience "sticker shock" the next time you go buy an item that now has carbon tax applied to it. The hope is that even though you got money back, when it comes time to actually pay the price on carbon when go to the store/gas station/pay your bill, you will think twice about how much of it you consume, if any. And if you choose to consume less, and don't end up paying as much carbon tax as you were reimbursed for this tax season, then the policy is working and you end up better off.
At the end of the day, in a democratic market economy, the government can influence your consumption decisions in two ways: taxing goods and services that bring about negative externalities/outcomes (i.e. pollution), and subsidizing positive externalities/outcomes (i.e. reducing carbon footprint by buying electric vehicles in jurisdictions that provide clean electricity). Both can be effective if done right.