In recent decades American government has developed a penchant for "sin" taxes of various varieties that push too far the definitional envelope of what is "rational" or "legitimate." Cigarettes, alcohol, and sugar were early sin substances targeted by legislatures for pecuniary castigation. But the latest and greatest sin is the fire-and-brimstone evil of scorching the Earth via our collective consumption ("anthropomorphic climate change"), for which will be imposed a regressive, ineffective, inefficient tax. It is called "The Carbon Tax."
It is axiomatic that American government — state, federal, local — is constrained by the state and/or federal Constitutions. The government is bound to certain areas of power and to certain procedural safeguards. One oft-recited maxim is that in order to be constitutional, laws must be "rationally related to a legitimate government interest."
With the likes of Greta Thunberg thundering down from furrowed brow about the irreversible end of the planet, the blame-casters seek to employ government in the greatest ever syntax (grammatical progression) of a sin tax. There are no cigarettes, tequilas, or fructose syrups upon which to levy this novel extraction of consumer wealth. This is Jonathan Edwards ranting at...thin air. Nor is there even a pretense of good accomplished — in Vermont, carbon tax proponents concede that curbing the Green Mountain State's paltry contribution to greenhouse gases will be globally insignificant.
The "Carbon Tax" furthers no legitimate government interest to measurably improve the ecosystem. It is unlikely to significantly alter fuel consumption. As related in a Wharton School interview:
To answer the question you raised — how should these taxes exist and how big should they be — the key question is how much people reduce consumption in response to the tax. Do they keep consuming the same amount and just pay more? Or do they actually reduce how much they're consuming?
The "Carbon Tax" is unquestionably regressive — it disproportionately burdens the poor. A 2009 George Mason University publication warned:
Sin taxes are regressive, falling disproportionately on consumers at the lower end of the income distribution. ... Daniel Suits actually found that excise taxes are the most regressive form of taxation. ... A significant number of studies, though somewhat controversial, argue that excise taxes have negative health consequences because they crowd out private expenditures, a portion of which would have been spent on private health and safety measures. This means that by instituting sin taxes, the government is effectively preventing people from spending their own money on things like safer cars, preventive medical check-ups, baby gates, and smoke detectors. Evidence shows that for every $15 million taken out of the hands of consumers, there is one statistical death. Another paper finds statistical evidence that the poor suffer more on the health front from dollars being crowded out by government policies.
It is well established that rent controls — however well intentioned — are counterproductive and ineffective. But rent controls initially do assist the targeted group of low-income renters; carbon taxes immediately punish the poor. Why would Vermont's Legislature rush to impose a large tax that won't achieve its stated end, but that will impact the economy and the poor adversely?
That George Mason commentary offers an answer:
So-called sin taxes, even those passed with the best of intentions, have undesirable consequences because they contradict basic principles of economics, finance and, most importantly, free choice. ... [T]axing sin usually does not end up significantly altering the "sinful" behavior but rather rewards the very private organizations or politicians who have lobbied for the tax. ... Sin tax activists strongly believe that most citizens are inherently incapable of making consumption decisions for themselves. ... Once it becomes "legitimate for government to protect individuals from their own follies," there is no way to establish limits to governmental powers.
In addition to taxing the gasoline of Vermonters' over-inspected cars, the Legislature plans to tax their home heating oil. Vermont suffers bitterly cold winters, and many people heat with oil. The non-working poor will still receive fuel free from the state, but presumably, they will receive aid in dollar amounts, so unless exempted, they will receive less fuel assistance.
To assist California corporations that pollute, Vermont is eagerly organizing schemes to "sell" sequestered carbon from Vermont trees as "credits" to "offset" that West Coast pollution. And for some time now, Vermont has imposed surcharges on electricity usage to "support" renewable energy corporations — the "market rate" for New England has been around 3.5 cents per kilowatt-hour, with Vermonters instead paying 14–18 cents per kilowatt-hour. In some cases, Vermont electric utility companies sell electricity to out-of-state customers at substantially lower rates than their Vermont customers.
This pretty much sums up the Vermont Carbon Tax situation. But instead of that "rational basis review" crafted by the United States Supreme Court, Vermonters may in hope rely upon Article 9 of the Vermont Constitution, which provides that "...previous to any law being made to raise a tax, the purpose for which it is to be raised ought to appear evident to the Legislature to be of more service to community than the money would be if not collected." That's a pretty impossible standard for the Fire & Brimstone Carbon Tax to surmount — Vermonters' money would clearly be of more service to the community if left in their pockets.
Originally published at American Thinker, December 2, 2019.