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Immediate Tax Rebates

January 6, 2019

The carbon tax has been in the news recently.  It’s a way to reduce carbon dioxide pollution, and a good one.  Of course, some people oppose it, either because they don’t believe that carbon dioxide causes climate change, because their jobs depend on fossil fuels, or just on principle.  If properly done, a carbon tax is a good way to reduce carbon dioxide emissions.  By itself, it does impose hardship on low-income people.  That’s why a tax rebate has to go along with it.

A carbon tax is simply a tax on products or services that emit carbon dioxide.  Gasoline will cost more, for example.  A carbon tax must be introduced gradually, to prevent disruption.  People can consume less, or can find an alternative.  They might drive less frequently, buy more efficient cars, ride public transit, walk more frequently, or buy electric cars, for example.

There is a problem with tax rebates, though:  They can only be processed when income tax returns are filed.  This is way too late.  People notice the increased cost every time they buy gasoline, for example.  They only become aware of the rebate once a year, when they file their income tax return.

The solution is for people to receive their tax rebate every time they purchase a product or service that’s covered by the carbon tax.  This would only apply to low-income people, of course.  I won’t receive a tax rebate because I have too much income.  That’s fine with me.  Retailers already rebate sales taxes for some people.  They’d only have to do the same for carbon taxes.

Certainly, people would have to register to receive the immediate tax rebate.  At the same time, they would have to estimate their income for the next year.  All of that is possible.  All of that can be done.  It’s not impossible.  Perhaps they would receive a card that entitles them to the carbon tax rebate, or a portion of it.  The final adjustment would still be done when they filed their income tax.  An immediate tax rebate would certainly make the carbon tax much more palatable.

 

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