Happy Election Day — A Tax Quiz

Yesterday I wanted to post the question, “How much tax revenue do you get from a bankrupt business?” Instead I went to bed. So I posted the question now.

Before you answer too quickly, bear in mind that one Presidential candidate has stated to the press (ten months ago, but they didn’t report it) that his proposed cap-and-trade tax on carbon emissions would bankrupt new coal-fired power plants and (emphasis on that conjunction, AND) bring in enough additional revenue to fund alternative energy sources. See this if you don’t believe me; here’s part of the transcript:

So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.

That will also generate billions of dollars that we can invest in solar, wind, biodiesel and other alternative energy approaches.

The only thing I’ve said with respect to coal, I haven’t been some coal booster. What I have said is that for us to take coal off the table as a (sic) ideological matter as opposed to saying if technology allows us to use coal in a clean way, we should pursue it.

So if somebody wants to build a coal-powered plant, they can.

It’s just that it will bankrupt them.

I thought you’d get zero tax revenue from a bankrupt business, but I’m not as smart as this particular candidate. I guess the one-time bankrupting “huge sum” is what will somehow generate “billions of dollars” for alternative energy.

But what of the people unemployed when the power plants go bankrupt, or the people employed (perhaps not for long) by the factories that either can’t get power or have to pay exorbitant prices for it? Not a word. (Or not a word that was reported. It will be interesting to learn if the newspaper involved deemed the quote un-newsworthy, or if they were asked to delete it by the campaign.)

Orson Scott Card pointed out on The Ornery American that this would amount to a huge tax on the poorest Americans. That shouldn’t surprise us, since this is the same candidate who vows to impose a penalty on businesses that don’t provide health insurance, on the supposition that taking more money away from the business makes the business somehow better able to pay wages and buy health insurance. (See this.)

Ah, the joys of election season. And tonight it will be all over. So sad. 🙁

But meanwhile … happy voting!

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