“For the last fourteen years, I have advocated and advocate today the elimination of all payroll taxes – including those for social security and unemployment compensation — and the replacement of that revenue with pollution taxes — principally on CO2. The overall level of taxation would remain exactly the same. It would be, in other words, a revenue neutral tax swap. But, instead of discouraging businesses from hiring more employees, it would discourage business from producing more pollution. A good swap.”

—Vice President Gore speaking yesterday at New York University

If that deal were offered seriously to us, our reaction would be to extend our hand and say, “Done.” Forgive us if somehow we’ve forgotten all those impassioned speeches the man from Tennessee gave during his eight years as vice president and a season as the Democratic Party’s presidential nominee calling for repeal of the employment-discouraging payroll tax. If Mr. Gore indeed has been advocating for this for 14 years, he is a worse communicator than even we thought. But that doesn’t make his idea a bad one.

On the contrary, repealing the payroll tax would open the door to a conversion of the Social Security system to one based on private accounts that would give individuals, rather than the government, ownership of their retirement nest eggs. And it would make taxation — the price of big government — more visible to consumers. Instead of having half the payroll tax hidden and paid by employers, the tax would be seen at the gasoline pump. Pressure might build for smaller government, especially if the pollution tax were applied to government pollution, too.

Mr. Gore’s essential insight — that if you tax something, you discourage it, whether it is employment or pollution or, for that matter, incomes — is one the Democratic Party seems to have forgotten as it heads into 2008 with a goal of reversing President Bush’s tax cuts that apply to income, capital gains, and dividends. Until yesterday we thought the prospect of Mr. Gore challenging Senator Clinton for the presidential nomination in 2008 existed mainly as a fantasy of Dick Morris. Mr. Gore’s speech here suggests otherwise.