Magazine article Insight on the News

Health Costs Will Engender Dangerous Tax

Magazine article Insight on the News

Health Costs Will Engender Dangerous Tax

Article excerpt

Two green monsters, working in concert, are about to tear apart the Clinton administration: The need for money to finance the deficit and nationalized medicine and the environment lobby's demand that we tax ourselves into fundamental changes in the way we live our lives.

Lately, the most appealing revenue generator, from the point of view of both taxation and regulation, is some type of energy tax. After all, in any form, it will generate revenue and discourage enjoyable inefficiencies (high-powered cars and incandescent lights, for example) while helping us to live less consumptive lives in the dimly lit city of Elegant Frugality.

If you believe - as do the environment lobby and the vice president - that global warming is the most important issue confronting mankind, then the most moral form of this tax is one based on the carbon content of fuels, because it is this carbon, when burned to dioxide, that slightly enhances the atmosphere's natural greenhouse effect. Vice President Al Gore was all for it - $100 a ton worth - in his best-selling book. For comparative purposes, a $100-a-ton carbon tax is equivalent to a total price of around $3 per gallon at the gas pump.

The problem is that a carbon tax will have a heavier impact on the fuel that produces a bit more carbon dioxide than others: coal. Now, 50 percent of the electricity produced in the United States comes from the energy trapped in these black rocks. In some states - Virginia, West Virginia and Kentucky, among others - coal is the principal source of external revenue. It is also a principal commodity in the transportation stream: Witness the colliers lined up at Baltimore and Norfolk, Va., or the strings of coal cars rolling down the Norfolk Southern, Burlington Northern, CSX and other rail lines.

Thus, if we tax carbon, we will gravely injure the economy and revenue base of many solvent states as well as the national transportation network - and there's no one, environmentalist or not, who doesn't think that privately held railroads are a darned good way to move things.

The carbon tax also appeals to the peculiar - some say liberal - sense of guilt that goes along with economic success. It's a fact that with 5 percent of the planet's population, the U.S. pours 22 percent of the world's carbon dioxide into the atmosphere. As a result, we enjoy a way of life undreamed of a century ago.

What goes unnoticed in this comparison is the necessity to relate carbon dioxide emissions to economic output, to measure how much economic bang you get for the carbon buck. …

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