By Tim Anderson
April 30, 2011 -- The proposal for a carbon tax raises the issues of tax equity and political strategy. Yet despite their inter-relatedness, we need to disentangle these issues to focus on the original question. As a mean of addressing climate change, the carbon tax proposal comes in the context of difficult global negotiations, where almost any proposal has been seen as a breakthrough, and where (after the last financial derivatives bubble) there is justified suspicion of emissions trading schemes.
In Australia the political context includes a narrow, two-party debate which has reverted to tax incidence, with both major parties basically captured by the major investor groups and Labor having recently been humiliated over a failed proposal for a new mining tax. Into this mix we have the Greens, presenting as an alternative, yet signing an accord with the Labor government over its carbon tax.
I would like to briefly touch on the tax equity issue, before moving to the carbon tax and then to the question of political strategies.