Today’s New York Times editorialized in favor of federal gas taxes and carbon taxes that would “pull triple duty by raising revenue, reducing dependence on foreign oil and helping the environment.”
I have just two quibbles:
1) Why differentiate (as the editorial does) between a gas tax and a “tax on industrial carbon emissions”? A tax on all carbon emissions would include a tax on gasoline and would yield economic and environmental benefits by treating all sources of carbon equally.
2) The editorial claims that the federal deficit is $415 billion, but this is misleadingly low because it includes as current revenue an estimated $153 billion that is being “saved” (primarily in the Social Security Trust Fund) to help shore up retirement programs in the years ahead. Eliminating this double-counting shows the true deficit to be more like $568 billion. This is shown in Table 1 of the Congressional Budget Office’s recent budget outlook. (Note that their estimate, which came out in September, predicted a “off-budget deficit” of $422 billion, not $415 billion. I come up with $568 billion for the “on-budget deficit” by adjusting the CBO estimate to account for this slight difference.)
