Has Capitalism Lost Its Human Interest?
What
Our Economist said in 1984 about the challenges of networking to free markets - see our weblog on
de-politicize , NOW!
What's being said now:
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>>Jerold Hubbard, USA
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>>TAXATION SHIFT TO SUPPORT THE RIGHT KIND OF END RESULT
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>>04 11 06
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>>ITS INCOME TAX TIME FOR AMERICANS
>>And It's Time for the Entire World to Lower Income Taxes and Raise
>>Environmental Taxes
>>http://www.earthpolicy.org/Books/Seg/PB2ch12_ss2.htm
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>>
>>Lester R. Brown
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>>As Americans are filing their income taxes, many of their counterparts in
>>several European countries are benefiting from a steady decline in income
>>taxes as governments lower taxes on income and raise taxes on
>>environmentally destructive activities - like burning gasoline or coal.
>>The purpose of this tax shifting is to incorporate the environmental costs
>>of products and services into the market price to help the market tell the
>>environment truth. This rewards environmentally responsible behavior such
>>as reducing energy use.
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>>Among the various environmentally damaging activities taxed in Europe are
>>coal burning, gasoline use, the generation of garbage (so-called landfill
>>taxes), the discharge of toxic waste, and the excessive number of cars
>>entering cities. Germany and Sweden are the leaders among the countries in
>>Western Europe that are shifting taxes in a process known there as
>>environmental tax reform. A four-year plan adopted in Germany in 1999
>>systematically shifted taxes from labor to energy. By 2001, this plan had
>>lowered fuel use by 5 percent. It had also accelerated growth in the
>>renewable energy sector, creating some 45,400 jobs by 2003 in the wind
>>industry alone, a number that is projected to rise to 103,000 by 2010.
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>>In 2001, Sweden launched a bold 10-year environmental tax shift designed
>>to convert 30 billion kroner ($3.9 billion) of taxes from income to
>>environmentally destructive activities. Much of this shift of $1,100 per
>>household is levied on cars and trucks, including substantial hikes in
>>vehicle and fuel taxes. Electricity is also being taxed more heavily. This
>>tax restructuring is an integral part of Sweden's plan to be oil free by
>>2025. Among the other European countries with strong tax reform efforts
>>are Spain, Italy, Norway, the United Kingdom, and France.
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>>There are isolated cases of using taxes to discourage environmentally
>>destructive activities elsewhere. The United States imposed a stiff tax on
>>chlorofluorocarbons to phase them out in accordance with the Montreal
>>Protocol of 1987 and its subsequent updates. When Victoria, the capital of
>>British Columbia, adopted a trash tax of $1.20 per bag of garbage, the
>>city reduced its daily trash flow 18 percent within one year.
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>>Cities that are being suffocated by cars are using stiff entrance taxes to
>>reduce congestion. First adopted by Singapore some two decades ago, this
>>tax was later introduced by Oslo, Melbourne, and, most recently, London.
>>The London tax of £5, or nearly $9 per visit, first enacted in February
>>2002 by Mayor Ken Livingstone, was raised to £8, more than $14, in July
>>2005. The resulting revenue is being used to improve the bus network,
>>which carries 2 million passengers daily. The goal of this congestion tax
>>is a restructuring of the London transport system to increase mobility and
>>decrease congestion, air pollution, and carbon emissions.
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>>While some cities are taxing cars that enter the central city, others are
>>simply imposing a tax on automobile ownership. New York Times reporter
>>Howard French writes that Shanghai, which is approaching traffic gridlock,
>>"has raised the fees for car registrations every year since 2000, doubling
>>over that time to about $4,600 per vehicle - more than twice the city's
>>per capita income." In Denmark, the steep tax on an energy-inefficient new
>>car doubles the price of the car.
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>>An excellent model for calculating indirect costs is a 2001 analysis by
>>the U.S Centers for Disease Control and Prevention (CDC), which calculated
>>the social costs of smoking cigarettes at $7.18 per pack. This not only
>>justifies raising taxes on cigarettes, which claim 4.9 million lives per
>>year worldwide (more than all other air pollutants combined), but it also
>>provides guidelines for how much to raise them. In 2002, 21 U.S. states
>>raised cigarette taxes. Perhaps the biggest jump came in New York City,
>>where smokers paid an additional 39¢ in state tax and $1.42 in city tax -
>>a total increase of $1.81 per pack.
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>>If the cost to society of smoking a pack of cigarettes is $7.18, how much
>>is the cost to society of burning a gallon of gasoline? Fortunately, the
>>International Center for Technology Assessment has done a detailed
>>analysis, entitled "The Real Price of Gasoline." The group calculates
>>several indirect costs, including oil industry tax breaks, oil supply
>>protection costs, oil industry subsidies, and health care costs of
>>treating auto exhaust-related respiratory illnesses. The total of these
>>indirect costs centers around $9 per gallon, somewhat higher than those of
>>smoking a pack of cigarettes. Add these external costs to the average
>>price of gasoline in the United States - just over $2 per gallon in 2005 -
>>and gas would cost $11 a gallon. For Americans, this is shockingly high,
>>but it is not that much higher than the $7 per gallon that Dutch motorists
>>paid briefly in late 2005 or the $6 per gallon that British, German,
>>French, and Italian drivers now regularly pay for gasoline.
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>>Asia's two leading economies - Japan and China - are now considering the
>>adoption of carbon taxes. For the last few years, many members of the
>>Japanese Diet have wanted to launch an environmental tax shift, but
>>industry has opposed it. China is working on an environmental tax
>>restructuring that will discourage fossil fuel use. According to Wang
>>Fengchun, an official with the National People's Congress, "Taxation is
>>the most powerful tool available in a market economy in directing a
>>consumer's buying habits. It is superior to government regulations."
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>>Environmental tax shifting usually brings a double dividend. In reducing
>>taxes on income - in effect, taxes on labor - labor becomes less costly,
>>creating additional jobs while protecting the environment. This was the
>>principal motivation in the German four-year shift of taxes from income to
>>energy. Reducing the air pollution from smokestacks and tailpipes reduces
>>the incidence of respiratory illnesses, such as asthma and emphysema - and
>>thus overall health care costs.
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>>Some 2,500 economists, including eight Nobel Prize winners in economics,
>>have endorsed the concept of tax shifts. Harvard economics professor N.
>>Gregory Mankiw wrote in Fortune: "Cutting income taxes while increasing
>>gasoline taxes would lead to more rapid economic growth, less traffic
>>congestion, safer roads, and reduced risk of global warming - all without
>>jeopardizing long-term fiscal solvency. This may be the closest thing to a
>>free lunch that economics has to offer."
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>>Accounting systems that do not tell the truth can be costly. Faulty
>>corporate accounting systems that leave costs off the books have driven
>>some of the world's largest corporations into bankruptcy. The risk with
>>our faulty global economic accounting system is that it so distorts the
>>economy that it could one day lead to economic decline and collapse.
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>>If we can get the market to tell the truth, then the world can avoid being
>>blindsided by faulty accounting systems that lead to bankruptcy. As
>>Øystein Dahle, former Vice President of Exxon for Norway and the North
>>Sea, has pointed out: "Socialism collapsed because it did not allow the
>>market to tell the economic truth. Capitalism may collapse because it
>>does not allow the market to tell the ecological truth."
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>># # #
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>>Adapted from Chapter 12, "Building a New Economy," in Lester R. Brown,
>>Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble
>>(New York: W.W. Norton & Company, 2006), available for free downloading at
>>www.earthpolicy.org/Books/PB2/index.htm