Supply-side guru Arthur Laffer tells me that it’s better to tax carbon than almost anything else
By Reilly Capps
Did Sandy, which plunged Lower Manhattan, the world’s most powerful island, into the dark, change the climate – the political climate, the intellectual climate – of the discussion on global warming? Did it change it … as far away from the East Coast as Colorado Springs?
That’s how it seemed over dinner at the Broadmoor, a ritzy old hotel that is to conservatives what the Fortress of Solitude was to Superman.
While his audience put away lamb loin and Cabernet, the man who had been Reagan’s go-to guy on low taxes and supply-side economics voiced an opinion so unorthodox he might as well have been a pastor renouncing God.
He said it wouldn’t be a bad idea to do something about global warming.
“A carbon tax,” he said, “makes a lot more sense than most taxes.”
The man was Arthur Laffer, father of supply-side economics, who never met a tax he wouldn’t cut. He had just finished a spiel about how Obama’s tax policies will lay the country low. But, in response to a question from this reporter about Sanday and climate change and a tax on carbon, he didn’t laugh or brush it off. He answered it.
“I don’t have any knowledge of climate change,” Laffer told me. “That’s a different PhD.”
And the crowd laughed.
“But I think a carbon tax is a lot less damaging than a progressive income tax,” he said. We ought to cut income taxes, he said, because that will encourage people to work more. If we need to find a way to replace those government revenues, a carbon tax ought to be high on the list, because it will discourage people from polluting (because it will cost them).
Laffer went on to talk about how he favors so-called Henry George taxes – which stipulate that that natural resources, like oil, belong to everyone, and companies that extract them should pay high taxes to take them. But when he said his bit about a carbon tax, you half expected the foundations of the hotel to shake, the audience to riot.
To be clear, Laffer has been talking about this long before Sandy. Here he is in a video he made for a conservative group working to pass a carbon tax:
There’s a growing roster of conservatives who think the way Laffer does. Even the strongest anti-tax crusader, Grover Norquist, flirted with the idea of a carbon tax last week.
Was it the election, when voters failed to buy the line that global warming is a joke? Will this made Republicans see the light?
More on this in posts to come.