Taxes are always a major issue of debate and this is especially true for the topic of carbon taxes. The production of carbon dioxide not only effects the environment, but it also impacts all individuals. There are both social and environmental issues that are involved in the production of carbon dioxide and play a part in the carbon tax movement. Carbon pollution is seen by many to be negative and require additional tax for all corporations that continue to produce it. A carbon tax is designed to make those corporations responsible for the production of carbon pay for the negative impact that it has on society. However, the pros and cons of a carbon tax are still up for debate.
Pros of Carbon Tax
1. Less Carbon Dioxide
The major benefit of a carbon dioxide tax is that less carbon dioxide will be produced as a result. If a high tax is associated with carbon dioxide production, the tax will act as a deterrent and keep carbon dioxide production to a minimum. All corporations that decide to continue producing carbon dioxide will be penalized monetarily and this will help to lessen production. Taxing is the best way to cut down on carbon dioxide production.
2. Encourage Innovation
Another benefit of carbon tax is that many corporations will start looking for new innovation. This means that they will look for new engines that run efficiently without the production of carbon dioxide. By creating a carbon tax this serves as a form of motivation and will inspire a lot of corporations to begin looking for alternatives. Taxing could be the best way to bring about needed change.
3. Has the Ability to Increase Revenue
Increased revenue is one of the major benefits of a carbon tax. All of the revenue that is generated from the carbon tax can also be used to encourage the growing green movement and positively impact the environment. This could involve the production of green electricity and reversing much of the damage that has been done to the environment at the hands of carbon dioxide production.
Cons of Carbon Tax
1. Corporations Will Relocate
A huge downside to the carbon tax could be the loss of jobs due to location of corporations that are responsible for carbon dioxide production. Many of these corporations will simply choose to move to countries that do not issue this tax and it will result in the loss of many jobs. This could have an adverse effect on the economy. Taxing will not stop carbon dioxide production, but will just change the way it is produced.
2. Costs Money to Tax
Promoting and implementing a carbon tax is incredibly expensive. The government will need more funds at their disposal to make it possible to actually enforce this tax and ensure that it is functioning properly. It will only have a positive impact if more funds are available to implement the carbon tax properly.
3. Encourage Secretive Methods
Many feel that the carbon tax will also encourage corporations to get sneakier with carbon production. This could result in even worse effects as a result. The tax might not completely deter, but just add more secretiveness.
What is the Purpose of a Carbon Tax?
As time goes on, the production of carbon is only becoming a growing problem. The production of carbon dioxide becomes larger and larger, which also has a bigger impact on the environment and air quality. The suffering from carbon dioxide also increases as a result of bigger production. The situation requires action to ensure that global warming, health and environmental issues are not just swept under the rug and forgotten. The purpose of the carbon tax is to penalize big production of carbon dioxide and look to further the damage that carbon dioxide is having on the environment and society as a whole.
Who Does Tax Impact?
The carbon tax has been created by the government to directly impact businesses and corporations that are most responsible for the production of carbon dioxide. This means that it is design to internalize the externality and make sure that these corporations are the one paying the big price. It is based off of the “polluter Pay Principle” in both design and theory.