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Rex Murphy is Scared

Rex Murphy has a piece in the National Post warning that “warmists” might use low oil prices to introduce a carbon tax. “Can you not, just one time,” he thunders, “allow a little of the benefit to flow down and let those who most need and appreciate some small break have that break? Must their one parade be rained on?”

Rex’s rant shows how little understanding he has of how the carbon tax works when it is packaged with a carbon dividend.

Start with the need to fix a broken price system. If burning carbon causes damage, the people who burn the carbon should pay for the damage. They don’t now. They get a freebee for polluting. They should pay a “corrective tax.” This is elementary economics, Rex, and it is a fundamental part of your moral code. You have heard of liability law and tort law? They are the basis of our legal system. Under our system, if you do harm to anyone, then you have to “make it good”. If you burn carbon you should pay the costs. It is actually a Rex Murphy kind of moral proposition, so you should be in favour of a carbon tax for moral reasons.

If the price of burning carbon covers the damage you will probably burn less carbon. You will do less harm to others. A carbon tax will make you a better man, Rex! I think you grew up Catholic, so that must appeal to you.

But who gets the extra seven cents a litre? You imagine that we sneaky economists want to use it to pay for holidays for the Premier or pensions for MPPs. You haven’t been listening.

We want to give it back to you! To you, Rex. You will be able to buy just as much gas as you bought before, so you can’t possibly be worse off. (Actually, Rex, since you might be up there in the top 10% of the income distribution, your check might not quite pay for all the fuels you burn. The vast majority of Canadians will actually get more than enough to cover the extra costs of fuel.)

Economists have proposed different ways to give the money back. Some want to cut income taxes, others want to cut corporate taxes, some want to use it to buy you better green technology to help save your children from climate disaster, some want to pay down your national debt. All these sensible ideas seem to have confused you pretty badly, Rex, so lets make it simple.

Lets just write a check for everyone. Lets demand that the carbon pricing legislation say the government has to send everyone a check each month equal to their share of the carbon tax collected.

You will spend that carbon tax money, Rex, but you will spend at least some of it on low-carbon goods and services: (some people might even use their check it to buy your book, Rex!) The spending that is directed away from the fuel companies will actually stimulate the economy.

So you see, Rex, you actually want to see a Carbon Fee and Dividend brought in. You didn’t k now it until now, but a carbon tax makes you behave better. Every self-righteous bone in your body is begging for a carbon tax.

Don’t say it out loud, though, because the fanatics at the National Post will stop publishing your rants.

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