Problem

Trump’s tax proposal, as appetitizing as it seems, has no Congressional legs.

Furthermore, sans a massive entitlement austerity measure, it would prove economically irresponsible.

ARAMCO IPO Limits  Fossil-Fuel Capital Market Upside 

The fossil-fuel oligarchs realize that in a post-ARAMCO IPO world, they have a very clear ceiling on the NPV of their assets:  ARAMCO alone drains over $1 TRILLION of fossil-fuel investment FROM the O&G industry.

This means the world’s lowest cost-producer will not only drain capital from competing producers, but it will do so in an era of declining Western demand for fossil fuels.

The outlook is not good for fossil-fuel market capitalization, long-term.

This means that, even if taxes were high, there would be less American O&G/fossil fuel wealth to tax, anyway, in the future.

It makes a lot more sense to capture as much of that demand today, rather than waiting for a liquidity event to tax an asset or business in a declining sector.

“Tax Reform” IS A CARBON TAX!!!

This situation presents an opportunity to secure lower income and estate taxes(or nullification) in exchange for a national carbon tax.

Carbon Tax Cheaper Than Income Tax(for the Rich)

The common people will pay more for energy and suffer a bit of inflation(transient), but the wealthy will gain immensely from lower income and death taxes.

Furthermore, a Carbon Tax has a much wider base.

National Carbon Tax:  A “VAT” That Wins Support of Moderate Left

Democrats in the US can not only gain huge support from disgruntled moderate voters, but the Democrats can also finally assuage their backers that the Sandernistas were a cynical and episodic phenomenon, not a trend.

Model of Future:  Lower Income Taxes for National Carbon Tax

The future leans to behavioral rather than asset or income taxation:  too many people are becoming exempt from paying taxes, and with a nominally socially-responsible aspect to the Behavior Tax, frankly regressive taxes such as a Carbon Tax can win broad support and also allow the oligarchy to safely maximize their personal NPV in a treacherous political market.

Carbon Tax:  First of Many Behavioral Taxes

The successful implementation of a national carbon tax will be used to help design future national behavorial taxes in the US, including sugar.

General Mills:  watch out!

2nd Amendment Blandishments 

With distractions from the gun-lobby, the expectation is that the lower-classes who will have to swallow this regressive tax will be either too divided or anxious about their gun-rights to meaningfully resist the carbon tax at the polls.

Trump Plan:  Introduce National Carbon Tax to Get Income Tax Reform

To win support from Moderates and the Left, Trump will propose a National Carbon Tax in order to cinch support for his income tax reform.

This means we will have a national headline on Carbon Taxes being imposed on Americans:  it will move markets.

The time-line should be sometime this Summer for this deal to become public.

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