In that sense, I’m not sure an unfunded mandate is any different than a tax increase on a specific activity with the goal of reducing or offsetting that activity.
I do agree there is an important truth here.
A “punitive tax” and a “funded mandate” are exactly identical from a Pareto-optimum point of view. In one case the costs show up as higher prices, in the other as higher taxes, but the net effect should be the same. But sometimes I think we should have a funded mandate (Medicare for all) and sometimes we should have a tax (carbon tax).
Why?
I think it partly boils down to political expediency. Most people agree that health-care is good and so it should be subsidized. Most people think global warming is bad, hence it should be taxed.
I also think we should choose whichever one is simpler.
Imagine a counter-factual world where we taxed “non health insurance” and subsidized “negative carbon emitting activities”. Because everyone—presumably—needs the same type of insurance, we are creating addition work in which each individual is required to seek out and buy a product that is ultimately supposed to be identical for everyone.
Conversely, in order to subsidize negative carbon emissions, the government would be required to determine the carbon footprint of every individual and subsidize individuals whose footprint was lower than this amount. This would be massively more complex than simply taxing carbon “at the source”. In fact the easiest way to implement such a subsidy would be to implement a carbon tax and then give every individual a “carbon subsidy” that they could use to pay for the tax. This is precisely what a carbon tax+UBI rebate does anyway.
I do agree there is an important truth here.
A “punitive tax” and a “funded mandate” are exactly identical from a Pareto-optimum point of view. In one case the costs show up as higher prices, in the other as higher taxes, but the net effect should be the same. But sometimes I think we should have a funded mandate (Medicare for all) and sometimes we should have a tax (carbon tax).
Why?
I think it partly boils down to political expediency. Most people agree that health-care is good and so it should be subsidized. Most people think global warming is bad, hence it should be taxed.
I also think we should choose whichever one is simpler.
Imagine a counter-factual world where we taxed “non health insurance” and subsidized “negative carbon emitting activities”. Because everyone—presumably—needs the same type of insurance, we are creating addition work in which each individual is required to seek out and buy a product that is ultimately supposed to be identical for everyone.
Conversely, in order to subsidize negative carbon emissions, the government would be required to determine the carbon footprint of every individual and subsidize individuals whose footprint was lower than this amount. This would be massively more complex than simply taxing carbon “at the source”. In fact the easiest way to implement such a subsidy would be to implement a carbon tax and then give every individual a “carbon subsidy” that they could use to pay for the tax. This is precisely what a carbon tax+UBI rebate does anyway.