Tuesday, May 6, 2008

All 3 Candidates Would Increase Energy Taxes

Forget the gas tax--Howard Gleckman at the Tax Policy Center points out that Obama, Clinton, and McCain have all endorsed cap-and-trade, which translates into massive increases in energy taxes. It's never been clear to me whether cap-and-trade would only be used for industrial emissions or would somehow apply to vehicle fuel as well (gasoline, diesel, and jet fuel). I've read papers that say that cap-and-trade would be essentially equivalent to a carbon tax, but that's not the case if a carbon tax would cover fuel but cap-and-trade would not. It would be a strange policy to use cap-and-trade to tax industrial emissions but leave fuel taxes right where they are.

More on point of the current debate: I think the gas tax flareup speaks to the moral leadership (or lack thereof) of the candidates and what we could expect to see from them in office. If McCain and Clinton are arguing for a gimmicky gas tax cut now, how can we possibly believe that they're going to stick to their promises on cap-and-trade later on, once people realize that it means they'll have to pay more for some things?

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