All things being equal, I would consider a federal tax on water and energy. An important point in the readings is that water and energy can be considered a basic human right and should be available to everyone. If there was a tax on water and energy, my thoughts wandered to my home state of Maine. Maine is known for having a low average income with its poor heavily subsidized for water and energy, especially heating oil during the winter.
For sheer simplicity sake, I would take a flat tax over cap and trade. Taxes are much easier to understand than cap and trade. Water and fossil fuels are a finite and endangered resource and a tax would make people think twice about wasting these precious resources. But, everyone has a right to have access to these resources so they should be offered at a low price and then increase in price the more you consume.
Maine has such a large percentage of people below the poverty line that the tax system may have to be adjusted. For example, Mainers spend a large percentage of money on heating oil, especially during harsh, cold winters. Taxing Mainers in addition to oil costs that do not have a lot of money takes away from basic needs. Also, there could be multiple renters within the same house or apartment further increasing costs.
Already there is a large financial burden on the state to help offset heating costs. One example from the readings may be to charge at the “high” price and offer rebates for low income users. I simply do not see this strategy for Maine being sustainable. Another point from the readings is that subsidies are expensive, skew the market, and have no multiplier affects. What may be more advantageous is to offer financial incentives for home and apartment owners to switch from fossil fuels to cleaner sources of heat. Regardless, there will be high heating costs in Maine’s future to subsidize.
Being taxed is a fair system in general, but not to those who are below the poverty line. I believe water and energy are basic human rights offered at lower prices and then increase the more one consumes. But, in a state like Maine, consuming energy such as oil in the winter will be consumed in large quantities and the poor and elderly simply cannot afford it all on their own. The government can help incentivize conversion to cleaner ways to heat homes. Regardless, Mainers will face high heating costs in the foreseeable future.