Joe Manchin Just Made A Great Argument In Support Of A Carbon Tax

West Virginia Senator Joe Manchin set off environmentalists last week when he said tax credits to subsidize the purchase of electric vehicle (EV) tax credits are “ludicrous.” His argument: It makes no sense for government to subsidize EV purchases when demand for the vehicles far exceeds supply.

In the short run, Manchin is right. But in the long run his reasoning is exactly the justification for a carbon tax, though he might not want to admit it. If the goal is to use government policy to encourage manufacturers to dramatically increase the supply of EVs, a carbon tax would be much more efficient than an EV credit. 

To understand why, start by reading what Manchin said:"There's a waiting list for EVs right now with the fuel price at $4. But they still want us to throw [a] $5,000 or $7,000 or $12,000 credit to buy electric vehicles. It makes no sense to me whatsoever. When we can't produce enough product for the people that want it and we're still going to pay them to take it—it's absolutely ludicrous in my mind."