Monday, February 01, 2010

Carbon tax weeds out everyone who isn't rich

From the National Post, February 01, 2010 (summarized)

The Pembina Institute, a left-wing think tank, says the current 3.33¢ per litre carbon tax in British Columbia needs to increase to 50¢ per litre - and that's in addition to federal and provincial sales taxes, plus other taxes that subsidize public transit.

British Columbia already has the highest gasoline prices in Canada because of these taxes, and raising them will make commuting even more expensive. But Vancouver also has the most expensive housing in Canada, so people are forced to commute to work from cities 30 km to 60 km away. Since the high speed public transit system doesn't reach the places where most commuters live, commuters have no choice but to pay the high gas prices.

Carbon taxes, in effect, are a way of rooting out middle and lower income workers who can't afford to live in Vancouver, and soon won't be able to afford to commute to Vancouver either.

My comment:

For those who do have access to transit, the fares are so high that two people travelling together spend almost as much commuting by transit as they would commuting by car - and even more if they have to drive to the transit station and pay to park there (especially with our new 21% tax on parking fees, plus federal and provincial taxes on top of that).

I've always thought that increased taxation is the worst way to try to fix environmental and other problems. Higher taxes hit the poor hardest. Taxes that hit working families hurt children twice: they have less money today, and their parents are forced to forgo saving for their retirement, so their children will have to care for them then and won't see much of an inheritance.

My parents lived through World War II and the postwar era when goods of all kinds were scarce. The government issued ration coupons to make sure everyone, rich or poor, got their fair share. There is no reason why environmental resources, such as the right to emit a certain amount of carbon, can't be shared equitably through rationing.

A common objection to rationing is that it creates a "black market" in the scarce goods. But there is really no moral objection to people trading their share for something they need more. And if the rationing is done through a secure network like the ones that support credit and debit cards, not only can the scarce goods be traded freely, but these transactions can even be taxed!

A rationing system would be better for the environment because it would directly limit the consumption of the scarce goods, instead of trying to influence consumption by overpricing them. And a free market in "ration rights" would produce a fairer distribution of consumption at a lower overall cost to consumers.

So why don't we do it that way? Two reasons: it's hard for any politician to admit that the real goal of punitive taxation is to create a de facto rationing system. And it's also hard for any government to resist an opportunity to collect taxes. When our governments are willing to level with us about the former and forgo the latter, we will start making progress on this issue.

No comments: