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Just Don't Say The T-Word

No matter what you might think about the merits of a carbon tax for reducing emissions, it's pretty widely accepted in Washington that the word "tax" has magical radioactive powers, and, for that reason alone, it's impossible to get a policy like that through Congress. (That partly explains the momentum behind cap-and-trade.) But is this true? Do people really have some incurable aversion to the word "tax"?

Seems like it. Via Julia Whitty, here's a new study from a trio of Columbia psychologists that tries to settle this question. Test subjects were broken up into two groups, and each group was allowed to pick between pricier and cheaper versions of various items like airline tickets. Group A was told that the more expensive items included the price of a "carbon tax," whose proceeds would go toward clean-energy development. Group B was told that the costlier items included the price of a "carbon offset," whose proceeds would go toward clean-energy development. Exact same policy, just different names for each.

You can guess what happened next. In the "offset" group, Democrats, Republicans, and independents all flocked toward the pricier item. They were perfectly happy to pay an extra surcharge to fund CO2 reduction—even Republicans gushed about the benefits of doing so. Not only that, but most of the group supported making the surcharge mandatory. In the "tax" group, however, Democrats were the only ones willing to pay for the costlier item. Republicans in this group were much more inclined to grumble about how much more expensive the tax made things. Labels really do matter.

(Flickr photo credit: Dan_DC)