I was curious about the numbers. According to the Fresno Bee, "This legislation would initiate a fee of $15 per metric ton of carbon, rising by $10 per ton each year. All revenue would be paid out equally to every household. In 10 years, a family of four would receive an annual 'carbon dividend' of about $3,500."[1]
Based on those numbers the tax per metric ton would be $105 ($15 + ($10 * 9)) in year 10.
Per capita emissions in the U.S. are about 16 metric tons and slowly declining.[2][3]
As everybody gets paid an equal amount, if consumption remained steady then in year 10 an average family of 4 would be paying 4 * 16 * $105 == $6720 in carbon taxes. Since the expected payout is $3500, they seem to be assuming carbon consumption would drop by 50% to ~8 metric tons.
Even if you tried to make this scheme more progressive, I can't see how you could bring in enough revenue to get anything close to even a mini-UBI, and especially not a UBI that could begin to replace existing government services. After subtracting higher prices from UBI payments, and considering the fundamentally regressive nature of the tax itself, you'd be lucky to get into 4-digit territory per year for an entire family of four unless you did something extreme like only paying the bottom quintile, but then you're effectively adding a hefty tax to the middle class. And at $105/ton consumption already drops by half, so there's no room for increasing the tax to increase revenue.
A carbon tax is one thing; pretending it can fund a UBI seems like a pipe dream.
UBI == Universal Basic Income. $100/year might be universal, but no kind of income, not even a mini basic income. The term is at best meaningless at such paltry figures, but I'd argue it's disingenuous and misleading to use it that way.
H.R. 763 seems like legislation I could get behind, but not because it's a UBI. It's not even a good wealth transfer of any kind. The payments are just a way to soften the blow of the tax, but the reality is that it would disproportionately impact those lower on the income scale, especially in climates that require significant A/C, or for those in rural areas spending a high proportion of income on automobile travel. And that's before considering issues like delayed remuneration, which also has a strongly regressive effect, even if payments were month-by-month.
A carbon tax is regressive, period. It's a well established fact. There's no way around that. See consumption graphs, here: https://www.lse.ac.uk/granthaminstitute/wp-content/uploads/2... The phrase by definition means it's a horribly inefficient mechanism for wealth transfer. The lower you go down the income scale, the more carbon emissions are created by each dollar spent. That means you pay more tax as a fraction of income the lower your income. And don't forget, there are a ton more poor people than rich. Ultra-wealthy can't help you because marginal carbon consumption basically flatlines at the top. Furthermore, consumption elasticities means it's easier to switch away from high-end carbon intensive goods and services (e.g. sushi shipped from Japan) than low-end goods and services (gasoline, heating), so a carbon tax has the effect of becoming evenworse at wealth transfer the better it works to reduce emissions.
If we do institute a carbon tax, and I think we should, we'll need another mechanism to offset the additional burden imposed on the working and middle classes. For example, increasing income taxes.
I'm not saying it's a livable income. I don't think there's anything in in the definition of "income" that says a person needs to be able to live off it. It just means money that comes in. Anyway, the prefix mini should indicate that it's smaller than normal UBI.
>The payments are just a way to soften the blow of the tax, but the reality is that it would disproportionately impact those lower on the income scale, especially in climates that require significant A/C
Why? Wouldn't the poor person use less A/C than the rich person? The the poor person would overall profit from it.
>That means you pay more tax as a fraction of income the lower your income.
Sure, but paying the money back a fixed amount per person leads to an even more extreme fraction of income of money gained by the poor people. You've got a regressive tax (carbon tax), then a much more regressive tax (fixed dollar amount per person). Except the second one is a negative tax, so overall the 2 taxes together are progressive.
Yeah, sorry. I should be clear: I didn't in any way mean to imply that a carbon dividend would come close to being a UBI, just that it works the same way: a fixed chunk of money for everyone, every month/quarter/year. A nano-UBI, really. We'll still need a real UBI.
I also don't want to imply that the bill in question is primarily concerned with wealth redistribution or UBI. Its main objective is to allow the free market to find the most cost-effective solutions to emissions reductions.
We've had such a carbon fee and dividend program in Canada for 1.5 years now and yes, by and large poor people benefit more than rich people for the reasons outlined by Thorrez.
