The Great Irish Carbon Tax Experiment

Interesting report in the New York Times today, about a carbon tax scheme in Ireland and how it’s going. I suspect more than a few politicians, both in Canada and the U.S., will want to look at this, so here’s a few points in summary:

  • It’s definitely a vote-loser for whichever administration brings it in. The Irish coalition government that brought it in, got voted out of power last year.
  • It’s definitely a revenue generator. Because it’s essentially defined as a form of consumption tax, it’s brought in a whack of cash to a government in sore need of deficit reduction.
  • It most definitely does not help the poor. The government had to bring in a subsidy program for low-income homeowners, to help them defray the cost of the tax.
  • People learned to live with it. This is probably the one thing that gives hope to carbon tax proponents and causes its critics to gnash their teeth. Yes, a few industries are grumbling and complaining, and certainly more than a few citizens are suspicious of just where all that carbon tax money is going. But, by and large, people learned to accept the rate, and adapted their lifestyles in order to reduce its impact. There was no tax revolt, only a sense of satisfaction from its proponents that the tax is doing what it’s designed to do.

This is one of the reasons why I don’t believe a sustained attack on the NDP over alleged plans to introduce a carbon tax are going to work. Most people understand that a tax, once introduced, is very, very hard to get rid of; the most one can do afterwards is keep the rate to a reasonable minimum.

The carbon tax scheme, depending on how it’s designed, will in all likelihood go like the GST: big complaints from the opposition and interested parties, followed by loud protests over its implementation, followed by a change in government over how badly it was managed, followed by the realization of the incoming new government that the tax would be difficult if not impossible to get rid of, followed by years of learning to live with it, followed by grudging acceptance.

There’s also one other significant difference between Ireland and Canada, in that Canada is a federal system. The federal government, no matter who’s in power, will in all likelihood argue that the provincial level is the more appropriate one for a carbon tax scheme.

The one sure thing is that, because of its revenue potential and because people are still making noises about the environment and climate change, the idea of a carbon tax is not going to go away any time soon. Which is why it’s a good idea to keep an eye on Dublin and how their finances are going.

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About PhantomObserver

I'm an information specialist / animation artist living and working in Ottawa.
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6 Responses to The Great Irish Carbon Tax Experiment

  1. anon1152 says:

    You are right: it will be interesting to watch how these “carbon taxes” pan out.

    It’s not just Ireland. A number of countries have “carbon taxes”. Some have had them for many years. And some of them (various northern European countries) are doing just fine economically.

    http://en.wikipedia.org/wiki/Carbon_tax

    I find the term “carbon tax” a bit misleading since it’s only a tax on certain CO2 emissions, not a tax on all carbon. That said, I’m not against a tax on greenhouse gas emissions. I’d rather tax greenhouse gas emissions than income, for example.

  2. Johnn says:

    The HST was a government killer here in BC but the Carbon Tax seems to have survived all criticisms.

    Most people in BC believe that certain other taxes were reduced in equal measure, to offset the newly implemented carbon tax, as was the original promise by gov’t. There was not supposed to be an increase in our personal taxes. Time will tell.

  3. old white guy says:

    carbon based organisms living on a carbon based planet. wow, lots of room for taxes there eh. taxing carbon makes about as much sense as trying to get rid of it. hey, lets destroy the whole universe that will fix that pesky carbon problem……..old white guy.

  4. bertie says:

    I thought the Irish had more sense than that. What a foolish mistake. What have they been drinking? They must be the wealthiest people on earth or the dumbest. Another country that will follow Greece and Spain and many other green worshiping countries into bankruptcy. When will these counties start thinking for themselves and quit being followers? These carbon tax scams have never worked for anyone because man cannot control the weather. We are not gods, we are more fools than anything else, only because we follow more than lead and we do not learn from past mistakes. And we seem to only listen to fools.

  5. johndoe124 says:

    I wasn’t aware that we had any disposable income left to tax.

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