Andrew C said:

It's not true that the Tax Foundation study ignores revenue recycling -- it's clearly examined in Box 2 on page 12 of the full study. That box illustrates how household burdens from cap and trade would be affected if revenue from the program is recycled in the form of federal corporate income tax reductions, illustrating that many households would BENEFIT on net from a cap and trade system (see quintile 5).

Throughout the paper, you can easily take revenue recycling into account by (1) assuming some distribution of revenues from cap and trade among households, and (2) overlaying those on the study's burden tables to arrive the "net" household burden from cap and trade.

Because there are myriad possible revenue recycling schemes -- many of which are more likely to occur in practice than others -- it's not possible to present them all in one study. Instead, we've presented one very realistic scenario in Box 2, and left the many other possibilities to readers to derive from the published tables themselves. The study examines only the price effects on consumers, and it clearly explains that throughout.

Saying that the study "makes no reference" to the possibility of revenue recycling is simply wrong, and is not careful criticism of the paper.

Richard Adam Hendricks said:

We certainly have to owe a great deal of thanks and
top honors to Kristen Sheeran and to other intelligent,
top-IQ economists like her, she certainly have done the
math when it comes to setting the whole record straight
on what economic impact will have on the cap and trade
will have on the American Economy. So, in an effort to
set the record straight in Congress and with President
Obama, what Sheeran and other inteligent economists who
say that the cap and trade program would never hurt the
economy should do right now is take this matter over to
Capitol Hill and give Congress and the US Suprme Court
their correct view on now the cap and trade program can
help the economy and give America the utmost relief the
country needs.
The same cap and trade rescue plan has been adopted
in other places, like Europe, Canada, Africa and Japan,
and they turned out to be a monumental success in their
own countries and never have posed any threat to their
economies. The United States, too, can take pride from
the same rescue plan that have worked around the world.
Those who do say the cap and trade program can hurt the
American economy have not taken a complete view of this
program and they need to either get the math done in an
acurate way or have their heads examined. They're both
rumours and corporate lies!
So let's give the United States the clean-up job it
has been demanding for over decade and finally usher in
those green jobs that will bring greater prosperity to
our economy and get us absolutely ready for a cleaner,
energy-driven future.

James Handley said:

Thanks Luis, for mentioning a carbon tax.

The Carbon Tax Center and the Climate Crisis Coalition support a revenue-neutral carbon tax-- returning revenue to households either by reducing payroll taxes or by a direct distribution. Cap/trade is a hidden, volatile regressive tax. A revenue-neutral carbon tax is explicit, predictable and can be progressive-- reducing payroll taxes would stimulate employment and especially help low and mid-income earners.

See www.carbontax.org and www.pricecarbon.org for petitions, letters to Congress and a video of Dr. James Hansen and two economists explaining the advantages of a revenue-neutral carbon tax.

Andrew C said:

It's not true that the Tax Foundation study ignores revenue recycling
-- it's clearly examined in Box 2 on page 12 of the full study. That
box illustrates how household burdens from cap and trade would be
affected if revenue from the program is recycled in the form of
federal corporate income tax reductions. The table clearly illustrates
that many households would BENEFIT on net from a cap and trade system
under this scenario (in particular, households in the top income
quintile).

Throughout the paper, you can easily take revenue recycling into
account by (1) assuming some distribution of revenues from cap and
trade among households, and (2) overlaying those on the study's burden
tables to arrive the "net" household burden from cap and trade.

Because there are myriad possible revenue recycling schemes -- many of
which are more likely to occur in practice than others -- it's not
possible to present them all in one study. Instead, we've presented
one very realistic scenario in Box 2, and left the many other
possibilities to readers to derive from the published tables
themselves. The study examines only the price effects on consumers,
and it clearly explains that throughout.

There's nothing in the paper that says cap-and-trade is necessarily bad policy, or that a carbon tax is necessarily a superior approach to climate policy. And saying that the study "makes no reference" to the possibility of revenue recycling is simply not correct, and is not a careful criticism of the paper."