RIGHT.

Excellent point.

So the carbon tax is even more perverse then my original estimate.

I think I’ve won this argument. So is the matter resolved yet?

No compromising with this lunacy.

Sometimes one needs to compromise in practical politics. But we don’t need to do this now when faced with this near-universal fantasy about excessive warming. They must be talking about a different planet entirely.

One can imagine it coming down to horse-trading at some point. But why give away all your ground now?

Plus I want to reiterate that this issue is a good opportunity to differentiate ourselves from the other guys.

To stand out clearly and get heaps of publicity and/or sponsorship.

Surely somewhere out there there is an oil or coal company we can graciously accept money from.

Then of course the next thing is all these leftist lunatics will accuse us of being in the pay of oil and coal companies….

… FREE PUBLICITY.

Of course, it is not a point to accelerate this natural phenomena, but from a view of a planetary epochs thousands of years not so big passage of time at all, anyway.

So what?

It was your point not mine. You said we should not be substituting away from oil. I merely pointed out that broadening fuel tax to cover coal and to reduce the burden on oil would not be encouraging a substitutsion away from oil.

And its a bad time to make that trade.

Its a hoax for many reasons. And one is for the idea that a little bit of human warming in an ice age is a bad thing.

AGW is a screwed-up concern. Since its bigoted against the human race.

We should take our warming with good grace wherever we can find it.

“And if you taxed coal more and petrol less then you would tilt things towards oil (which with Hydrogen bonds delivers more energy per unit of CO2 emitted).”

So what?

CO2 is a positive externality.

The alarmist movement is a fraud and you seemed to forget all this within seconds of beginning your post.

2. See I told you so. I’d trade these positive externalities for the positive externalities of reduced income tax. Although if I could have my cake and eat it then all well and good.

3. Which is just point 2 repackaged.

4. Actually our well being is far less energy intensive than it was half a century ago. And if you taxed coal more and petrol less then you would tilt things towards oil (which with Hydrogen bonds delivers more energy per unit of CO2 emitted).

I think I’ve gone over this.

A carbon-tax is totally objectionable since:

1. Its very existence is standing propaganda in favour of a damaging hoax.

2. We are missing out of the positive externalities of extra CO2.

3. If indeed CO2 does warm the planet a bit we are missing out on a potential mitigation against a new glacial period within our nasty ice age.

4. Since we face substituting away from the primary energy source of oil this is the worst time in industrial history imageinable for such a tax.

You and I have discussed the double taxation of savings inherent in income tax previously. The issue really isn’t in doubt and I thought you agreed.

I didn’t try to wave away the debate with “it’s complex”. I don’t think I’m required to give full economics lectures every time somebody get economics wrong and as you point out the issue was tangental to the debate.

But if I must…

1. Interest is paid to compensate for the time value of money and to represent risk. If you make a return from risk that is legitimately understood as income, but to be compensated for the time value of money is not a net increase in total wealth measured in net present value. Consequently, taxing the interest (or capital gain) that represents the time value of money represents a tax in addition to income tax. As returns are only paid on savings then those who save more pay relatively more than those who save less. As richer people have a higher marginal propensity to save (MPS) then they pay relatively more, over and above the proportional level. Therefore: progressive.

2. As you are fond of pointing out with regards to CGT, the fact that income tax will be charged on future income reduces the return that a invester can offer on their debt/equity. So the return on that debt/equity is effectively taxed twice. Once again, as richer people have a higher MPS then they are stung by this double tax on savings more than poorer people. Therefore: progressive.

A salient point Terje, but it is worth pointing out for the non-economists that the resulting high price will result in increased supplies being found or made and conservation measures to be uptaken.

“And if they ban incandesent light bulbs then how on earth am I supposed to incubate chickens?”

Or brew beer in winter…etc. This goes back to Hayek, in that alternative uses of a product are not considered, nor are the effects of substituting behaviours (e.g more use of mercury, phosphorous etc in flourescent bulbs). All of this has no backstop without secure private property rights and prices reflecting scarcity and opportunity costs.

Technical question: what about halogen lamps?

In privatisation terms I’d look at the power stations and the electricity retailers long before I’d look at the transmission or distribution components of the electricity market. And I’d privatise transmission before distribution because duplication in the former makes a lot more sence than in the later. Victoria is further ahead than NSW on these measures.

The microeconomic reform bandwagon really needs to move ahead now in the state sphere more urgently than at the federal level. Turnbull should be screaming about the low price charged for urban water rather that fiddling with light bulbs.

Regards,
Terje.

That said, so far Turnbull has been something of a disappointment…