Comments on: CAFE Pile-On

By: Gabe Nichols

Gabe Nichols — Mon, 13 Nov 2006 18:27:55 +0000

As a funding source for universal health insurance why not use the funds that are already paying for American health insurance, corporate coffers. Unless one feels that a government system would be less efficient then the current for profit insurance scam (which would require rejecting all evidence from Medicaid, Medicare, and the VA medical system) it would be possible to do this with an increase in corporate taxes significantly lower than the savings businesses which currently offer benefits would reap. Businesses which don’t offer benefits would be hurt but a little bit of pain for them isn’t the biggest issue for me. Add in the savings both to corporations and individuals by eliminating the Medicare portion of payroll taxes (and this would be a nice time to increase the social security take to cover the funding issue, people could still be left with a bit more in their pocket at the end of the day)
Corporations save money, people save money; politically this is a win-win. Off course a single segment of the economy is wiped out but if the HMO’s can’t adapt to the changing global environment in which the US health care system hurts US competitiveness well then that’s the way the market crumbles

By: PM

PM — Sun, 12 Nov 2006 03:07:28 +0000

“I am against, with every fiber of my being, Mark’s well-meaning but wrong suggestion of using a carbon tax to pay for Social Security, while scrapping the payroll tax. My posting below not withstanding, Social Security basically works, as is, both politically and in policy terms. It’s the largest and most effective program of social insurance we’ve got. I’m enough of a temperamental conservative not to want to screw with things that work. There are changes we can make basically within the parameters of the program to make it more progressive and ensure its fiscal balance (like increasing the cap on taxable earnings). Leave it alone.”
Leave the payroll tax alone? Please, no! As Alex points out, the payroll tax is extremely regressive, and, frankly, unfair. (That my boss and I will pay roughly the same in marginal taxes on our next raise, even though he makes $75k more than I do, rankles me badly.)

By: Alex

Alex — Sun, 12 Nov 2006 02:25:30 +0000

I appreciate your desire to keep the SS program intact, and the legitimate concern that major changes could break it. Still, you’re pretty much writing off all sorts of relevant facts:
The tax, which is one of the largest now in the budget, is our most regressive. Furthermore, payrolls are really about the last thing you want to tax, since payroll taxes lower wages directly when they don’t kill jobs outright.
The tax at this point is largely being used to finance tax cuts for the very rich, rather than for SS. That’s outright criminal. But it’s the reality.
If we don’t do something about carbon emissions, there’s a substantial probability of a global economic meltdown that will imperil SS, as one of the less significant results.

By: Valuethinker

Valuethinker — Sat, 11 Nov 2006 15:41:07 +0000

There is a groundswell out there against the Pigovian carbon tax, after Mankiw and others started advocating it.
And they make a good point (see the economist Dieter Helm at Oxera) which is that:
- the demand elasticity of carbon appears to be far outweighed by the income elasticity of carbon emission
Consider a rise in world oil prices from $20/bl (1999) to �70/bl (2006). Has world oil consumption fallen? No, it has increased.
World CO2 emissions have actually accelerated in their rate of increase in that time, despite a coincident rise in the prices of other energy sources.
The equivalent carbon tax would be, I think, something like $50/tonne of carbon (I don’t have the data to hand on that, if anyone can correct me).
You start to talk about levels of carbon taxation which are just politically and economically not feasible.
Mandating IGCC power plants, (which are ideally adapted for carbon sequestration and storage), rather than conventional coal plants, or taxing carbon and letting the market choose the technology, may be economically inefficient, but we may have to go down that root ie prescribing the degree of carbon reduction achieved by different sectors.

By: Cranky Observer

Cranky Observer — Sat, 11 Nov 2006 13:26:55 +0000

You are vastly underestimating the effects of corporate inertia, corporate push-back, and customer lock-in. To wit: General Motors has and has had for 20 years the ability to build vehicles that get better fuel economy. One of the reasons they have not is the feedback loop between customers who think their preferences are entrenched and constituencies within the corporate behemoth (somewhat less behemoth-y these days for sure). This lock in makes it impossible for even the most brutal division manager or CEO to force the kind of change he knows is needed for the long term.
CAFE, and emissions laws, actually help the managers who want change by giving them an external club to smash down the pushback. “Increase the fuel economy or we will both end up in jail” actually can work to cut through corporate politics.
Look at Honda vs. GM in 1980. The Big 3 deployed exactly these same arguments against CAFE and the Clean Air Act. Honda just shut up and got to work building more efficient cars and engines. I loved my 1976 Oldsmobile, but I doubt I would let my kids drive one today. And the kicker is my Ford Fusion has more horsepower, better performance, and _vastly_ better fuel economy than that “Rocket 350″. A large part of the reason for that is the club of laws, not the varying incentives of gas prices.
Cranky
PS I also think the US needs a gas tax that goes up $0.05 every other month for 5 years, possibly with a rebate mechanism for the poor.

By: druidbros

druidbros — Sat, 11 Nov 2006 09:38:03 +0000

Yes, we need universal health care. It is criminal we dont have it yet. If prevention is the focus it will be very much cheaper than the way we have it now.