Skip to main content

Posts

Showing posts with the label Incentives

Incentives and Balance

A number of times recently, while having a discussion about a policy with friends or acquaintances, the regressivity of a policy has been raised as a concern.  In one case it was gas tax, in another a carbon tax, in another a bag fee. Does being regressive make a policy bad?  While I agree, it is a point against, it's not the final decision point.  A policy should be looked at in terms of its larger context.  While it's hard to justify putting additional burdens on those with less, a policy can be enacted within a context of policies that overall lighten the burden.  It's beneficial to do so when the policy has net benefits.  For example, a basic carbon tax is regressive; the poor as a percentage of their income are more dependent on gasoline and energy.  But if a carbon tax is enacted within the context of a equal direct cash payment, the overall effect is progressive. It's also important to recognize that distribution can be the smaller questio...