Moran says: "It is the consumer... that pays the costs of the carbon tax. Costs are passed on in price increases or are reflected in lower levels of competitiveness of our industries."

The same is true of corporate income tax. So why is a carbon tax singled out for special approbrium?

Moran: "A carbon tax at $30 per tonne levied only on electricity would raise a further $6 billion ($15 billion if it is on all emissions)."

And the revenue can be used to retire other, less efficient taxes. This, as you may recall, was the argument in favour of the GST. Ah, but that's different, isn't it? -- because the GST was proposed by the Tories!

Moran quotes Churchill: "I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."

Churchill, of course, was a supporter of land-value taxation, to which that colourful phrase doesn't apply, because land is a gift of nature and its value is conferred by the activities of parties other than the owner, so that taxing the owner on the value of the land cannot deter any productive activity; on the contrary, it encourages the owner to deploy the land productively in order to generate income to pay the tax.

Moran: "Even without other problems, a tax requires the deadweight of a bureaucracy to administer it and to redistribute the funds it raises."

Again, the same can be said of GST and corporate income tax -- the more so because both are more complicated than a carbon tax.

Moran: "And, if a $26 per tonne enhanced productivity just think what wonders $260 per tonne would do!"

Yes, just think. On Moran's figures above, $260 per tonne across the board would raise $130 billion per annum, which is enough abolish personal income tax!

Ahem... "approbrium" should be "opprobrium".

are there "Tories" in Australia?

The taxes the GST was meant to retire, were the State taxes, which were managed by the .. Labor governments, who of course reneged on the deal.

Maybe if the "tories" did this, we could get the British Labour party to fix it ..

Sounds like some pom fondly remembering the old country, where things were so great, that they came to Australia, (with all their old ideas and prejudices.) and want to repeat and build all that crap up again here .. go home!

Amicus: The states have not "reneged" on abolition of conveyancing stamp duty. If they had, they would have been liable to have their GST revenue cut off. They simply have not yet specified a date for its abolition, because the timetable of the original agreement was ridiculously vague.

As for the significance of the political colour of the State governments, I haven't noticed the Libs in WA abolishing stamp duty. Oh, yeah, that's because WA is being ripped off in the distribution of GST revenue -- by the formula drawn up under Howard.

If you really want to do something about stamp duty, I suggest that you join the stamp-duty strike instigated by Yours Truly: http://is.gd/psd_strike .

A carbon tax will see prices go up on many items. But the author here pays very little attention to the role of compensation in this scenario. With compensation low and middle income groups could actually be *better off*.

Properly structured assistance to trade exposed industries will also be crucial. Experimentation could yield the best results here - Starting with higher compensation - examining carefully the effect on industry - and adjusting accordingly.

The carbon tax is about creating such market conditions that innovations in low-emissions technology is pursued - with consuners having an incentive also to pursue those alternatives.

That said; it is possible that once the transition is made to lower emissions technolog there will be less pollution to tax, and less income to fund the compensation. That might necessitate alternative funding arrangements.

Our hope in response this this is that incentives for investment in loss emissions technology will provide affordable alternatives. Hence cost structures going doing for ordinary consumers anyway. Again - solar paint looks really interesting here! See: http://www.greenlivingpedia.org/Solar_paint

re: the role of tax - As I've said elsewhere - take the examples of Sweden, Holland, Denmark. Large welfare states can be accompanied by strong economies as these examples prove. Welfare and social wage provision are SOCIAL INVESTMENTS. Investment in health, education, aged care, infrastructure CREATES VALUE. And collective consumption via the social wage provides better value than in the context of individual consumption.

But re: a Carbon Tax SPECIFICALLY. Well, if all the money goes to compensation then the effect will be one purely of redistribution and incentives for consumers and investors. But there is a social good in such inventives and redistribution - such that the costs of administration are justified.

I see that the author, Alan Moran, is from the Director of the Deregulation Unit at the Institute of Public Affairs. As per the website it states "IPA supports ..... evidence-based public policy ..... Our researchers apply these ideas to the public policy questions which matter today."

Suggest Alan you look at the evidence for climate change and the most effective ways of addressing it. Think you will find a carbon tax or an emissions trading scheme is the way to go. However as you and your organisation don't believe in climate change you are unlikely to find in favour of any approach that seeks to reduce carbon dioxide emissions. It might be more honest to say that.