The interventionists might favor such a coerced lifestyle change because of concerns over climate change, but they shouldn’t pretend that poorer households will enjoy being forced to cut back their energy usage
IER President Tom Pyle recently wrote an article for National Review's online magazine responding to George Schultz and Ted Halstead's own NRO piece making their case for a carbon tax. Pyle did a good job covering the important points of the argument, but space constraints prevented him from focusing on one issue in particular: If we could (naïvely) trust the federal government to refund all carbon tax receipts in lump sum checks, is it true that "the bottom 70 percent of Americans would come out ahead," as Schultz and Halstead claimed?
As I'll show in this post, their argument doesn't actually prove what they're suggesting. Even on its own terms, a carbon-tax-and-dividend scheme would still impose the biggest hardships on poorer households, since energy expenditures are a bigger share of their budget. Even if they "made money" on the deal, they would still be hurt by higher energy prices, and so Schultz and Halstead's claims are very misleading, even if we take them at face value.
