Over the past week we’ve seen some possible breakthrough steps toward a basic income. Did you miss that news? Not surprising, because it’s been buried in news reports about the Copenhagen Climate talks.

Sen. Maria Cantwell from Washington is introducing a bill calling for “cap and dividend” — a cap on emissions, with permits being auctioned off and the revenue distributed to American citizens. Here’s a quote from a McLatchy News story:

Under her bill, the federal government would auction off carbon shares to the nation’s 2,000 or so fuel producers like coal and oil companies. Every two years, the shares would expire and, over the years, the U.S. government would offer fewer and fewer shares for sale as a way to reduce carbon consumption.

Seventy-five percent of the money raised would be rebated directly to U.S. citizens. Cantwell’s office estimated that an average family of four would receive a total of about $1,100 a year in the form of tax-free monthly checks.

An important point is that the proposal seems to have some bipartisan support in the Senate, and even support from oil companies. The complete story, with the title “New Proposal Would Pay Americans a Percent of Carbon Permits” is here.

An even stronger version of this idea was in the New York Times a few days earlier. James Hansen, one of the world’s leading climate scientists, had a an op-ed denouncing the Democratic party’ “cap and trade” plan, and calling instead for “fee and dividend.” It’s an idea Hansen has advocated for some time, and that I’ve written about before.

Here’s an excerpt from Hansen’s op-ed:

Under this approach, a gradually rising carbon fee would be collected at the mine or port of entry for each fossil fuel (coal, oil and gas). The fee would be uniform, a certain number of dollars per ton of carbon dioxide in the fuel. The public would not directly pay any fee, but the price of goods would rise in proportion to how much carbon-emitting fuel is used in their production.All of the collected fees would then be distributed to the public. Prudent people would use their dividend wisely, adjusting their lifestyle, choice of vehicle and so on. Those who do better than average in choosing less-polluting goods would receive more in the dividend than they pay in added costs.

For example, when the fee reached $115 per ton of carbon dioxide it would add $1 per gallon to the price of gasoline and 5 to 6 cents per kilowatt-hour to the price of electricity. Given the amount of oil, gas and coal used in the United States in 2007, that carbon fee would yield about $600 billion per year. The resulting dividend for each adult American would be as much as $3,000 per year.

The complete piece, with the title “Cap and Fade” is here.

Fee and dividend, cap and dividend, tax and dividend — whatever you call it, and whatever the size of the dividends — this is the most direct and politically-feasible way to move toward a basic income in the United States.

The idea is so simple and powerful.  Tax fossil fuel consumption and redistribute the revenues on a per capita basis. The net effects would reduce consumption and pollution and climate change overall, while promoting social justice and a stronger democracy.  I discuss this in more detail in my book, Peaceful, Positive Revolution: Economic Security for Every American.

Steven Shafarman

There have been lots of news stories over the past two days about the Obama administration setting stricter fuel efficiency standards. Opponents insist that the new standards will raise car prices and hurt consumers, without much impact on climate change.

The continuing conflicts and complexities are clearly considered in a Wall Street Journal story. The first few paragraphs follow, and the complete article is here:

Obama Would Support Auto Incentives for Consumers

WASHINGTON — The Obama administration would support the idea of giving consumers additional incentives to buy fuel-efficient vehicles, a White House official said Tuesday.

The White House would likely favor tax credits for vehicle purchases over any proposal to raise the 18.4 cents-a-gallon federal gas tax, as many industry officials and transportation experts have recommended.

“We fought for the $7,500 tax credit for the purchase of advanced technology vehicles in the Recovery Act,” the official said, and “our administration remains committed to policies to help bring the costs down” for consumers.

Industry officials in recent days have expressed concern that consumers might balk at paying a premium for costlier, more fuel-efficient cars and trucks if gas prices don’t rise to $4 per gallon or more in the years ahead.

The administration estimates fuel-economy regulations will add $1,300 on average to the price of new cars by 2016.

Suppose we start with income security for all, and every adult citizen is getting, say, $1,000 a month in addition to what we earn or get from other sources. Suppose, as well, that we pay for that, in part, through higher carbon taxes.

Everyone could afford to pay the higher gas taxes, higher costs for new efficient cars, higher costs for electricity, and so on. Everyone would have strong incentives to reduce fuel consumption, in order to save the money for other purposes.

Moreover, pairing the guaranteed income, Citizen Dividends, with the carbon tax is a way to make the carbon tax politically acceptable.

Among the most interesting aspects of the recent debates is the number of people who are saying that auto companies will make fuel-efficient vehicles when there’s a demand for them. As we saw last year, when fuel costs were so high, people were turning in their SUVs and buying much smaller cars. That was without any government mandates for vehicle fuel efficiency. That recent history is good evidence for this proposal to combine guaranteed income with carbon taxes.

(This idea, combining a guaranteed income and higher natural resource taxes, actually goes back to Thomas Paine and his 1793 pamphlet Agrarian Justice.)

The auto companies ought to be leading the campaign to enact this, because this would create huge demand for more efficient cars while providing people with the money to pay for them. Until now, auto companies have been saying that there’s not enough demand for more efficient cars. Higher fuel prices will create that demand, particularly if consumers know that prices will remain high. That certainty will come with a gas tax.

A more modest version of this is getting some public attention. It’s called “tax and dividend.” Most versions, however, would distribute the dividend as a cut in payroll taxes. That would leave out people who don’t work and earn, including the very poor and retired. A true guaranteed income would help everyone equally.

Guaranteed income was a mainstream, moderate idea in the 1960s. Martin Luther King called for it in his last book, and a plan to provide it passed the House of Representatives by two-to-one, but was blocked in the Senate. Proponents including leading economists from the left and the right.

The complete guaranteed income plan, the idea, the benefits, and how we can make it happen – including a discussion of carbon taxes – is in Peaceful, Positive Revolution,.

Additional information is on the home page and elsewhere on this web site.

I hope you’ll comment on this blog. And please help spread the word.

Steven Shafarman

If anyone still doubts the power of viral social marketing, there’s a nice example in today’s New York Times, and it relates directly to several aspects of income security for all. The Times story is about a video that was released on the Internet in December 2007, and is now being used in classrooms around the country and elsewhere, and stirring up lots of controversy.

The video is called “The Story of Stuff,” and I first watched it many months ago. Here’s the Times story. Here’s a direct link to the video.

The Times piece discusses the political aspects of the video, and notes that it does not engage in any specific issue advocacy. The video is not calling for political change, though it is clearly seeking to educate, inspire, and motivate social and cultural transformation. Currently, however, major obstacles to that transformation are the paralysis of our political system and the power of the special interests that profit from the status quo.

When the basic “stuff” for survival, an income for food and shelter at least, is guaranteed and provided to everyone, it will be a lot easier for everyone to be more responsible for our social, economic, and political acts. We can do that while preserving and strengthening free markets and individual liberties.

What we need to achieve all this, it seems, is a good viral video that presents income security for all.

Consider this a call for volunteers, suggestions, and contributions.

To learn more about these ideas, visit the home page and other material on this web site, www.IncomeSecurityForAll.org.

You can read the complete plan, the idea and how we can implement it, in Peaceful, Positive Revolution, which is available from Tendril Press.

I hope you’ll also comment on this blog. And please help spread the word.

Steven Shafarman

Dramatic changes are coming, according to most distinguished scientists. Individuals will have to prepare, and guaranteed basic income will ensure that everyone can afford to adapt as necessary. Our nation has to prepare, too, and ensuring that individuals can meet their basic needs is a critical step.

Here’s the article.

Even climate change skeptics might agree that basic income makes sense. After all, there’s no harm in being prepared, especially when doing so will provide enormous benefits with very low costs.

Steven Shafarman

Representative John B. Larson, chairman of the House Democratic Caucus, has circulated a draft bill that would impose “a per-unit tax on the carbon-dioxide content of fossil fuels, beginning at a rate of $15 per metric ton of CO2 and increasing by $10 each year.” The bill sets a goal, rather than a cap, on emissions at 80 percent below 2005 levels by 2050, and if the goal for the first five years is not met, the tax automatically increases by an additional $5 per metric ton. The bill implements a fee on carbon-intensive imports, as well, to press China to follow suit. Larson would use most of the income to reduce people’s payroll taxes: We tax your carbon sins and un-tax your payroll wins.

The complete column is here.

This is typical of Friedman, Rep. Larson, and most everyone who’s advocating any such carbon tax and offset plan: They bury the lead. They only talk about cutting payroll taxes after going into some details about the carbon tax, it’s goals, mechanisms, and other details.

A major problem with their approach, cutting payroll taxes, is that it leaves out two large groups, one of which is politically powerful. People who don’t work don’t pay payroll taxes. The left out groups are the very poor and seniors.
A better approach is to return some of the tax money to everyone. Every adult citizen should get some amount from the new tax, with that amount distributed directly to seniors, the very poor, and everyone who has no income, while the rest of us calculate it as part of our income taxes.

That would be much more just, and is likely to be more politically acceptable, easier to explain and sell to ordinary Americans. Many conservatives will applaud the universal aspects of this approach, the way it expresses a fundamental commitment to individual freedom and personal dignity.

Plus, tax and dividend would be much, much simpler to administer than cap and trade and payroll tax deduction. That simplicity is another important sales feature, because it translates as cutting government’s size and intrusiveness.

Steven Shafarman

Here are the opening words from each of the three paragraphs:

“The Environmental Protection Agency has told the White House that global warming is endangering public health and welfare.”

“Such a market-based solution could be accomplished either through a tax …”

“Yes, we know. A carbon tax is politically unpalatable for some. But it has advantages over a complex trading system and should be considered.”

To elaborate slightly: The EPA finding requires action under the Clean Air Act, but any regulatory approach would create “a glorious mess.” It’s better to rely on markets, higher prices, and a carbon tax would be less complicated and faster to implement than the cap-and-trade system favored by the Obama administration. There are political obstacles to enacting any such tax.

If there were a fourth paragraph, it might resolve the dilemma with something like this:

There is a way to win popular support for a carbon tax, and that is to return some of the money directly to the people. We can give every adult citizen a few hundred dollars a month, maybe more. Individuals and businesses will have the means and incentives to conserve, and each of us will be free to choose our preferred ways to conserve, smaller cars, working at home, insulating our homes, and so on. Returning the money through Citizen Dividends, or universal fuel rebates, will accomplish several important goals at the same time: attracting popular support for the carbon tax we need to reduce global warming; protecting and even increasing individual freedom; and enhancing social, economic, and environmental justice. We urge the Obama administration to enact this plan.

Steven Shafarman

Take every penny collected at the pump and put it right back into the pockets of consumers. …

The government could regularly send a check to everyone over 18. I am prepared to work with the Obama administration and colleagues in Congress to devise the most efficient way to return the revenue to the American people.

Lugar has enormous political credibility as a member of the Foreign Relations Committee, and reportedly has very good relations with President Obama.

Plus, Lugar discusses in some detail a similar proposal from conservative columnist Charles Krauthammer, who wants a “net-zero gas tax” offset with a decrease in the payroll tax. Here’s his Weekly Standard piece from January 5.

Another supporter of higher fuel taxes who Lugar mentions is Thomas Friedman. Here’s a New York Times piece where he calls for higher gas taxes as a way to facilitate many necessary reforms.

Lugar concludes:

A net-zero gas tax is the type of transformational policy that we could implement quickly and that would have immediate impact.

One of the simplest and most effective means available for strengthening U.S. national security is to dramatically reduce our oil dependence. A gas tax that returns money to Americans would take us a long way toward that goal.

It would also — if large enough, like a basic income — take us a long way toward ending hunger, homelessness, and debilitating poverty, and toward real progress on many other goals. Higher gas taxes and a basic income are a great fit — and the Alaska Permanent Fund Dividend is good evidence for that.