Subject: Fwd: Action: Creating a coalition for a revenue neutral carbon tax for payroll or co
Date: Sun, Aug 17, 2014
Msg: 101117
Following up on Tom Atlee's suggestion for issues, I'd like to suggest that the group considering organizing a campaign for a revenue neutral tax swap to exchange carbon taxes for either payroll taxes or corporate taxes.
One of the challenges of creating transpartisan action is that many partisans live in almost completely different conceptual universes. Thus, at the extreme, in the case of climate change, there are some on the left who believe that we are facing the end of the world and there are those on the right who believe that the entire issue is a matter of massive scientific fraud. We are not likely to resolve this "different universes" issue by means of online conversations within a reasonable time frame.
My understanding is that the original proposal to swap carbon taxes for payroll taxes was made at a transpartisan retreat some years ago by Bernie Munk, an energy economist who had gotten his Ph.D. under Milton Friedman. The idea was then taken up by Al Gore, and it went nowhere.
Despite the fact that it went nowhere the first time around, I think it is still a brilliant idea. But the first time around, insofar as the idea was publicized by Gore, it was known primarily as a Democratic policy proposal and it was regarded as primarily an issue in the climate wars.
In order for such a tax swap to gain traction, it should be introduced either by a broad range of non-partisan economists or, better yet, an entity or prominent figure on the right. It should be proposed primarily as an improvement in our tax code and NOT primarily as a volley in the climate wars.
The most likely way to get such a policy win led by the right would be to trade carbon taxes for a revenue neutral reduction in corporate taxes. The U.S. has the highest corporate tax rates in the OECD,
http://taxfoundation.org/blog/us-has-highest-corporate-income-tax-rate-oecd
The Cato Institute describes the corporate tax as the "worst tax,"
http://www.cato.org/publications/commentary/worst-tax
If a right-wing organization or leader proposed a revenue neutral reduction in corporate taxation in exchange for a well-designed carbon tax, and if that swap was supported by prominent left-wing organizations, then such a policy proposal might gain momentum.
The same sort of approach might be possible with reducing or eliminating the payroll tax (as originally proposed) rather than the corporate tax. But it would be more difficult for several reasons:
1. There is less energy on the right for reducing payroll taxes than corporate taxes. That said, there are many mainstream economists, respected across the political spectrum, who could be mobilized to support a reduction in the payroll tax.
2. The fact that social security is ostensibly funded by the payroll tax brings the issue of social security solvency into the conversation about the tax swap. We would have to develop a clever strategy to prevent this secondary, highly contentious political conversation from destroying the core proposal to swap carbon taxes for payroll taxes.
That said, a well designed (in terms of coalitions and rhetoric) around the carbon for payroll tax swap might also be possible.
Lest left-leaning transpartisans reflexively dismiss the possibility of reducing corporate tax rates, consider this fact: If Apple were to manufacture iPhones in the U.S. it would cost them an additional $600 million in labor costs - and an additional $3.6 billion in corporate income taxes. High corporate income taxes in the U.S. drive jobs overseas far more than do lower labor costs elsewhere. There are legitimate reasons to be concerned with the fact that the U.S. has the highest corporate tax rates in the OECD.
It is also worth noting that a reduction in corporate tax rates would provide a ready made constituency in support of the policy. Those energy companies that depend on carbon-based energy for their revenues, and industries that depend on carbon-based fuels, such as the trucking industry, will lobby heavily against such a tax swap. In order to stand a chance, perhaps we will need a LARGE vested interest on the other side of the equation. The interests in favor of a reduction in the corporate tax rate constitute a significant potential lobby.
Some large employers, such as Walmart and the fast food industry, might support a reduction in the payroll tax (low-wage workers would benefit most from such a policy move). But the question would be how many of them would go to bat in a big way for such a tax swap?
In order to get support on the right, it would also be crucial that the "revenue neutral" aspect of the swap was taken very seriously by both sides. It can't be seen as a way to sneak in a tax hike.
-- Michael Strong
Creating a World in which All of Humanity Flourishes
Co-Founder and CEO, Khabele+Strong Incubator Co-Founder and Chief Visionary Officer, The FLOW Project , now Radical Social Entrepreneurs Co-Founder and CEO, StartupLearning.Me Co-Founder, Startup Cities Institute Lead Author,* Be the Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the World's Problems * Author, *The Habit of Thought: From Socratic Seminars to Socratic Practice * Blogger at "The Purpose of Education is Happiness and Well-Being for All," "Let a Thousand Nations Bloom," and "Radical Social Entrepreneurs" Co-Founder of The Atheneum School , The Winston Academy (defunct), Moreno Valley High School (ranked the 36th best public high school in 2006 ), and The Bronze Doors Academy . Co-Founder, Conscious Capitalism, Inc. TEDx UChicago, "The Creation of Conscious Culture through Educational Innovation" TEDx GrandRapids, "Innovate: Experience" TEDx UFM, "Socratic Practice as Disruptive Technology"
-- Michael Strong
Creating a World in which All of Humanity Flourishes
Co-Founder and CEO, Khabele+Strong Incubator Co-Founder and Chief Visionary Officer, The FLOW Project , now Radical Social Entrepreneurs Co-Founder and CEO, StartupLearning.Me Co-Founder, Startup Cities Institute Lead Author,* Be the Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the World's Problems * Author, *The Habit of Thought: From Socratic Seminars to Socratic Practice * Blogger at "The Purpose of Education is Happiness and Well-Being for All," "Let a Thousand Nations Bloom," and "Radical Social Entrepreneurs" Co-Founder of The Atheneum School , The Winston Academy (defunct), Moreno Valley High School (ranked the 36th best public high school in 2006 ), and The Bronze Doors Academy . Co-Founder, Conscious Capitalism, Inc. TEDx UChicago, "The Creation of Conscious Culture through Educational Innovation" TEDx GrandRapids, "Innovate: Experience" TEDx UFM, "Socratic Practice as Disruptive Technology"
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