Is cap-and-trade a tax?

He probably has little else in common with Sarah Palin, but Warren Buffett is not a fan of cap-and-trade either, earning his position a debunking by Eric Pooley at Bloomberg. I won't belabor his points #1 and #3, because it's cliché at this point to point out that no, Waxman-Markey is not regressive (because of rebates), and no, just because allowances aren't auctioned doesn't mean the permit costs won't be effectively rebated to consumers anyway.

However, on an intellectual level, I don't agree with Pooley's point #2, where he says cap-and-trade isn't a tax:
In spite of the Republican Party’s relentless “cap-and-tax” talk, cap and trade isn’t a tax. It is a dumping fee for greenhouse gases.
(Actually he has a snappier line):
A new tax means more work for accountants. Cap and trade unleashes the engineers.
A "dumping fee for greenhouse gases" is a financial penalty imposed on an activity with undesirable externalities, which happens to raise revenue for the government - that sounds like a tax to me. And explain to me why cap-and-trade won't create "more work for accountants", or what cap-and-trade does to "unleash the engineers" that a carbon tax with proceeds directed partly to efficiency and renewables research would not?

Politically it makes sense to try to stave off Republican efforts to brand cap-and-trade as a tax, but intellectually it is hard to argue what else cap-and-trade could possibly be (unless we create a whole new taxonomy for policies that walk and talk like taxes). But even so, if Buffett continues to oppose cap-and-trade he'll have to find two new legs for his argument to stand on.

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