Carbon

Al Gore is gutsier than I realized. Dig this from a recent speech.

For the last fourteen years, I have advocated the elimination of all payroll taxes—including those for social security and unemployment compensation—and the replacement of that revenue in the form of pollution taxes—principally on CO₂. The overall level of taxation would remain exactly the same. It would be, in other words, a revenue neutral tax swap. But, instead of discouraging businesses from hiring more employees, it would discourage business from producing more pollution.

In comments at Ezra Klien's blog, Nicholas Beaudrot takes out a pencil and works out the figures.

Do the math!

The US produced roughly 6 million metric tons of CO₂ last year. Social Insurance taxes brought in $733 Billion in revenue Table F-3. A gallon of gas produces 20 pounds of CO₂.

The math says ... $.06 per pound of CO₂, or $1.20 per gallon of gas. pre-2004, gas was about $4.50/gal US in Europe, and below $2.00/gal in most of the States. This means we could enact a CO₂ tax and still pay less than Europeans pay for gas (which is around $6.50 today).

What's more, the payroll tax is almost entirely born by the worker. Someone who makes $40,000/year and drives 18,000 miles in a 20 mpg car (or cars) would still come out way ahead.