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Would a Carbon Tax Make Sense for America?

Would a Carbon Tax Make Sense for America?

By Kent Livingston

Unless you don’t own a TV or a computer then at some point you’ve heard the so-called environmental experts and political pundits speak of the dangerous effects of greenhouse gas emissions on global warming. There are two sides to every story, but most people would agree that more greenhouse gas emissions aren’t good. Time and time again, we hear of different studies that indicate global warming is getting worse, as are its effects. In fact, the White just released another report this month about the effects of global warming on climate change. According to that report, things are bad and getting worse.

Raise the Price to Decrease its Use

So what can be done about global warming and its effects? That depends on whom you ask, but one idea that has been discussed in many circles is to make people pay more for leaving a bigger footprint on the environment. Or, in other words, by raising the cost of carbon-emitting fuel you might be able to get people to use less of it. If that sounds like a tax to you, you’re right. It is. So could a carbon tax work?

Down With Carbon, up With the Alternatives

According to those who favor the idea, if the government enacted a carbon tax it would be able to rid itself of much of the current mess of regulations aimed at protecting the environment and conserving energy. By taxing carbon fuels it could also negate many of the current targeted subsidies, as well. A carbon tax could serve to decrease the demand for coal and oil and instead push the demand for alternative fuels higher, such as nuclear, wind or solar power.

The Downside

However, as with any possible new tax, no matter how good it sounds, there are always two sides to every story and it’s also possible that a carbon tax would have negative consequences, such as the following:

  • Most people don’t like new taxes, which means it could be difficult to implement.
  • Determining the exact amount of the tax could be challenging, while the external cost might also be hard to calculate.
  • Administrating the tax could be expensive and thereby negate the savings.
  • The U.S. could lose production to other countries that don’t require a tax.
  • It could lead to companies attempting to evade the tax by hiding carbon emissions.

Time for a Carbon Tax

Although it appears that a carbon tax could be the answer to many of the issues that come with greenhouse gas emissions and their harmful effects on the environment, it may take a lot more work to ever see a carbon tax become a reality. Plus, even though it sounds like a great solution, there are possible negative consequences as well. For some, just the idea of another tax is a negative.

GROCO Will Be Here

In any case, at GROCO we are here to help you with all of your tax planning and accounting needs. Whether or not a carbon tax becomes a reality in the future, we’ll be here today and in the months and years to come to help you with each of your complex tax situations. Just click here to contact us and let us help you minimize your tax burden in every way possible.

The post Would a Carbon Tax Make Sense for America? first appeared on Advisors to the Ultra-Affluent – Groco.

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