It’s astonishing a purported economist would say this

But we know this is not true. At almost every level this logic fails. First of all, we know that pricing does not change demand perfectly. Alcohol and tobacco prove it. So too does existing carbon pricing on oil: it has not stopped demand. In other words, this comment fails to take such factors (elasticities as economists call them) into account. So theory and practice do not prove this point. They prove the exact opposite, if anything. It is only regulation that will change demand for carbon: pricing will not, and most certainly cannot on its own.

Prices won’t change demand, eh? Blimey.

As to this:

No one believes that trickle down does or will work. And no one believes that those who promote carbon tax really believe in redistribution of the proceeds.

The standard proposal is that payroll taxes be decreased by the amount the carbon tax raises. Quite why this isn’t progressive is yet to be detailed.

Sigh.

15 comments on “It’s astonishing a purported economist would say this

  1. “this comment fails to take such factors (elasticities as economists call them) into account.”

    and Woosh is the sound “this comment” makes going over Richard’s head.

  2. Elasticities are the measures of the change in demand (or supply) caused by a change in price, are they not. But Murphy is saying that “this comment” which says that prices will affect demand “fails to take” elasticities into account.
    ER??

  3. I’ve just noticed that the excellent Morphy Richards twitter account has been ‘suspended’.

    Twitter seems not to understand satire / free speech (Godfrey Elfwick another victim, obviously).

  4. Murphy being against a carbon tax is NOT evidence FOR a carbon tax.

    A carbon tax is a bad idea.

    ‘So theory and practice do not prove this point.’

    Correct.

    Then he throws it all away:

    ‘They prove the exact opposite, if anything.’

    No they don’t!

    I lived through gas going from $0.35 to $2.00 a gallon in the early 70s. Whatever the price, you still have to get to work. Yes, you drive less, but you don’t stop. Something else in the budget takes a hit.

    ‘The standard proposal is that payroll taxes be decreased by the amount the carbon tax raises.’

    Rilly? Government shouldn’t be involved in such stupid games.

    Government has legitimate authority to tax the people to raise revenue to pay for its operations. It is tyranny for government to use its taxing power to try to manipulate the people’s behavior.

  5. Piss on Murphy and on eco-freak carbon-tax.

    Do you not get it Tim? That the wannabe Globo Elite intend to flop the West lower than whaleshit and eco-freakery is their means?

  6. Supply and demand describes market economics. Carbon, alcohol, sugar and tobacco taxes are intended to distort the market and suppress demand for things many people want. If people still want them to the same extent, they’ll choose to pay the extra and consume at the same rate as before, I certainly will with alcohol and carbon.

  7. Government has legitimate authority to tax the people to raise revenue to pay for its operations. It is tyranny for government to use its taxing power to try to manipulate the people’s behavior

    That should be tattooed on every politician’s forehead (women included) in reverse the moment they win the ballot. And that does include US Presidents.

  8. The standard proposal is that payroll taxes be decreased by the amount the carbon tax raises. Quite why this isn’t progressive is yet to be detailed.

    Because the rich tube-commuting metropolitan elites won’t suffer the carbon tax, whereas the rest of the country commutes by car and thus is clobbered. The French yellow vests understood this instinctively.

  9. “The standard proposal is that payroll taxes be decreased by the amount the carbon tax raises. Quite why this isn’t progressive is yet to be detailed.”

    A. I follow climate very closely and this is the first time I’ve heard of this “standard proposal.” An even more standard proposal that I have heard of is that the proceeds be applied to the mitigation of climate damage.

    B. Over the course of my 68 years I have observed many politicians and many fisci and never in economic history has a tax been applied purely to the purpose it was raised for. Once the swine get their hands on a revenue stream it will always without fail be redirected into pet projects, usually involving friendly pockets.

  10. First of all, we know that pricing does not change demand perfectly.

    Another in a long line of ridiculous straw men.

  11. “Quite why this isn’t progressive …”

    Payroll taxes only affect employers and, indirectly, employees. The poorest do not benefit from any reduction in payroll tax because the unemployed and OAPs dependent upon the state pension do not suffer it (nor do those nominally self-employed earning a few bob to eke out their resdundancy pay until they are old to claim a pension who are a sizeable minority of the bottom decile or quintile) and those on minimum wage are overpaid so any reduction in the cost of employing them will not feed through into a payrise.

    It has now been detailed.

  12. ‘First of all, we know that pricing does not change demand perfectly.’

    Another in a long line of ridiculous straw men.

    ======================

    Sounds correct to me. Where’s the straw person?

  13. Pingback: As Spudda notes | Tim Worstall

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