Thanks for your reply, VXZ. Let me try to address some of your concerns.
Carbon Taxes:
You’re right that prices would increase as a result of a carbon tax. But if it’s revenue neutral, and pays out in the form of a UBI, the effect is zero on average. The average person will see their cost increase be perfectly offset by the UBI. But people whose consuming habits produce less carbon emissions than the average person will end up better off: their costs will increase by less than the UBI they receive in compensation. This creates an incentive to reduce carbon emissions.
One way to think of this is in terms of compensating society for the distributed harms done by pollution. Pollution as a byproduct of consumption has the effect of hurting the ‘commons’, while benefiting the individual. This is a tragedy of the commons: a rational person would pollute more than is socially efficient, because the harms is born by everyone while the benefits go only to the individual. By taxing emissions, the harm gets priced in, so that the cost and the benefit are both born by the individual who makes the choice. The rational choice therefore changes, and is closer to the socially optimal choice.
You make a good point about the potential for off-shoring, but I don’t think that’s necessarily as big a problem as you say. Carbon taxes could be levied on imported goods at the time they are imported, thereby reducing the incentive to offshore to avoid the carbon tax.
Universal Basic Income
I’ve written more about this here (using the term BIG instead of UBI, but intending the same thing), but I’ll try to address your points here because I’m not sure if I respond to them all there.
This is using a strangely narrowed definition of taxes. If we look at the effective tax rates in the US, very few people pay zero taxes. The lowest 20% pay on average 2% in taxes. But while I think this criticism is important in reference to a general, unfunded UBI, it seems inappropriate here, where what’s being discussed is a fully-funded, revenue neutral carbon tax and UBI. So tax brackets aren’t relevant, only carbon use (or carbon-use-by-proxy, in the form of consumption).
So what we really need to know is how much a carbon tax will increase the cost of goods, which is hard to say. How much of the use of carbon-intensive consumption is just momentum? For example, refitting a plant to be less carbon intensive, or to use less carbon-intensive materials, may be costly, but how much of that is just the upfront cost of the transition, and will ultimately go back down after the change? One can reason that e.g. in a transition to renewable energy sources, building the windmills or solar farms or what have you is expensive, but energy costs thereafter may be lower than they are currently.
I agree that the UBI is counter-intuitive, but I also think you give it short shrift here. And I think your last sentence is completely backwards: it’s the resistance to UBI that is mostly virtue signaling, arguing that we shouldn’t adopt a UBI because then we’re just giving the lazy goodfornothings free money, and that’s not fair! Let me expand:
We already have a welfare system. We already give people valuable goods and services simply because those people need those services. This is a given. The argument is that UBI does more for the same amount of money already allocated to these programs. The burden isn’t whether we should be giving people things for free, we do that already. The argument is that cash is more efficient and achieves the same goals better.
The reason for that are many, but the two largest make the case:
First, various ways of restricting who can receive benefits imposes significant costs. The process of deciding requires significant overhead. And certain forms of exclusion attach perverse incentives, imposing high effective tax rates as income increases. These costs are probably not recouped by the savings, and a significant part of the money that is intended to be spent on alleviating poverty ends up going to relatively wealthy and well-off bureaucrats who administer it.
Second, the money that actual does go to recipients is worth more. Just as a gift certificate is worth less than the same value of cash, any spending that gets to the recipient in terms of vouchers, goods, or in-kind services is worth less than the value of those vouchers and services in cash. The recipients know better than the government can what their most pressing needs are, and the limited studies we’ve done show that recipients who receive cash spend it better and it in ways that improve their lives over the long term better than goods and services would.
So together, we have more money getting to the recipients because the overhead is reduced, and that money gets to them in a liquid form that is more valuable than it would be in the form of vouchers, goods, and services.