Taking Financialization Seriously—By Taxing It

Taking Financialization Seriously—By Taxing It

The smartest tax doesn’t have to raise a lot of revenue to do social good. The point of a carbon tax, for example, is to reduce greenhouse gas emissions to mitigate climate change. If it succeeds in incentivizing people to use less fossil-fuel-intensive energy, the economic gains would be enormous even if it raised little revenue. When assessing the value of a tax, we should look at both its potential revenue effects and why it might “fail” to g…