Last week Nouriel Roubini joined a long list of other economic "notables" by advocating a US gas tax of about $1 per gallon (phased in at about 10 cents per year for a decade):
It's High Time for a Carbon Tax: ... Think of a policy action that would:Posted first on Economic Dreams--Economic Nightmares
What is that policy? A "Carbon Tax"…
- Help reduce the large U.S. budget deficit and even make permanent some – but not all – of recent tax cuts
- Reduce the unsustainable U.S. trade deficit
- Reduce truly – not just rhetorically - the U.S. dependency on oil and energy imported from unstable regimes in the Middle East and other regions and would improve U.S. national security.
- Start seriously dealing with the problem of climate warming induced by greenhouse emissions, a problem prominently addressed by the recent Stern Report.
- Reduce the pre-tax equilibrium global dollar price of oil and thus improve the terms of trade of oil importers
- Reduce the power of unstable "Petro-States" (to use the Tom Friedman expression)
- Reduce road congestion and our demand for gas-guzzler vehicles
- Have broad bipartisan support
A long list of … economists and policy makers on both sides of the political spectrum have come in support of the idea of an energy or carbon tax including Larry Summers, Alan Greenspan, Martin Feldstein, Paul Krugman and Gary Becker.
A tax that reduces the budget deficit, the trade deficit, helps to solve the global warming problem and cleans up the environment, reduces the power of unstable regimes that export oil, strengthens the U.S. national security, has broad bipartisan support.