A group of former Republican administration officials (including James A. Baker, Henry Paulson, George P. Shultz, Marty Feldstein and Greg Mankiw) is proposing a carbon tax that would start at $40 per ton and gradually increase.
The proceeds of the tax would be distributed to every American.
The average family of four would receive $2,000 annually in dividends. As the tax rose, so would their dividends. Since everyone would receive the same amount of revenue from the tax regardless of their income level, the dividend would make a bigger difference for poorer families than for wealthier ones.
It’s a win-win: Less carbon in the atmosphere, and more equal distribution of income.
That it’s being proposed by Republicans doesn’t make the idea any less worthy.
I’m aware that some on the left would rather use revenues from such a tax to invest in clean energy and other social causes rather than return the revenues directly to the public. That detail can be worked out.
The idea is getting a hearing in the White House. And in these dreadful times, that’s good news indeed.
Robert Reich is the chancellor’s professor of public policy at the University of California, Berkeley, and a senior fellow at the Blum Center for Developing Economies. He served as secretary of labor in the Clinton administration, and Time magazine named him one of the 10 most effective Cabinet secretaries of the 20th century. He has written 14 books, including the best-sellers Aftershock, The Work of Nations and Beyond Outrage and, most recently, Saving Capitalism. He is also a founding editor of The American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences and co-creator of the award-winning documentary Inequality for All.