Hi Marcus! How's the wretched hive of scum and villainy DC?
I think it makes more sense to treat separately the question of how to raise revenue and the question of how to internalize externalities. We should have a carbon tax, not because it makes money, but because it corrects a market failure. We should have a consumption tax, not because we hate consumption and want to make it stop, but because we need a trillion dollars to provide public goods.
And I think a consumption tax probably ought to be progressive. You don't need multiple rates for it to be progressive -- a big standard deduction does the trick nicely.
And even if we don't make it progressive at all, that isn't necessarily a problem as long as we compensate on the spending side by skewing government benefits towards the poor (which we really ought to be doing anyway).
Not every single government policy decision needs to be made with equity in mind, and in fact most of them shouldn't be. It's almost certainly more effective to make revenue raising about revenue raising, correction of market failures about correction of market failures, and let the anti-poverty measures be about eradicating poverty. Nothing prevents us from simply expanding a single well-constructed anti-poverty program until it exceeds the cumulative effects of all the crummy little biases we keep trying to shoehorn into everything else the government does.
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winterfish
no subject
Date: 2008-09-13 04:04 pm (UTC)the wretched hive of scum and villainyDC?I think it makes more sense to treat separately the question of how to raise revenue and the question of how to internalize externalities. We should have a carbon tax, not because it makes money, but because it corrects a market failure. We should have a consumption tax, not because we hate consumption and want to make it stop, but because we need a trillion dollars to provide public goods.
And I think a consumption tax probably ought to be progressive. You don't need multiple rates for it to be progressive -- a big standard deduction does the trick nicely.
And even if we don't make it progressive at all, that isn't necessarily a problem as long as we compensate on the spending side by skewing government benefits towards the poor (which we really ought to be doing anyway).
Not every single government policy decision needs to be made with equity in mind, and in fact most of them shouldn't be. It's almost certainly more effective to make revenue raising about revenue raising, correction of market failures about correction of market failures, and let the anti-poverty measures be about eradicating poverty. Nothing prevents us from simply expanding a single well-constructed anti-poverty program until it exceeds the cumulative effects of all the crummy little biases we keep trying to shoehorn into everything else the government does.