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TODAY Tuesday 13 May 1997 Each weekday. Conn Nugent on what's new in the world, on the site. |
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TODAY Tuesday 13 May 1997 Each weekday. Conn Nugent on what's new in the world, on the site. |
TODAY IN THE WORLD: (Life Before) Death and Taxes
"Environmental taxes are perhaps the most powerful tool societies have for forging economies that protect human and environmental health."
Thus reads the first sentence of the first chapter of an important and persuasive little book published last week. The book's title is "Getting the Signals Right: Tax Reform to Protect the Environment and the Economy," its author is David Malin Roodman, and it's published by Worldwatch.
Roodman has studied and assimilated the growing body of literature on environmental taxes -- Robert Repetto, Frank Muller, Andrew Hoerner, Herman Daly, and Ernst von Weizsaecker are some of the leading lights -- and synthesized that literature in prose that's clear and easy to read. Roodman's book is rich in detail and analysis, but the basic thrust is simple and straightforward: societies should shift the burden of taxation off of the things we want (employment, investment) and onto the things we don't want (pollution, waste, depletion of finite resources).
In so doing, we would be bringing prices closer to costs. Is there a soul in the world who thinks that one dollar at the pump for a gallon of gasoline captures the costs of burning that gallon -- costs as measured in health care for pollution-related illness, losses attributable to climate change, and enormous outlays for the military capability to assure uninterrupted supplies? Or that the price on a 55-gallon barrel of herbicide adequately reflects the costs of protecting drinking water supplies for the town next to the cornfield?
The tax code offers many advantages as an engine for environmental protection. It lets the market do what the market does best: employ financial self-interest to produce ingenious adaptations. A stiff tax on an undesirable pesticide is almost certainly a faster and cheaper strategy to promote a less-chemical agriculture, for example, than a traditional regulatory approach, backed by a phalanx of extension agents. A straightforward code that taxed carbon and poisons would be much cheaper to administer, and much less intrusive, than the current model, and would have positive effects on job creation and the development of renewable sources of energy production. A smaller, simpler, clearer progressive income tax could be maintained to assure that an overall tax-shift placed no disproportionate burden on low-income households.
Unlike some other green tax advocates, Roodman thinks that more conventional regulatory approaches still have an important role to play (he cites the success of mandating scrubbers on smokestacks and catalytic converters on automobiles), and sees tradable permit systems as a useful variant of a tax approach for a number of easily-quantifiable problems. In fact his overall point is that we should use tools appropriate to the problem: withdraw subsidies there, impose taxes here, regulate closely over there.
I was thinking of Roodman's book last Thursday after reading a column by Peter Passell in the New York Times. Passell says that the so-called balanced budget agreement between Congress and the President is basically a shuck-and-jive operation because it doesn't dare touch Social Security, Medicare, and Medicaid. Outlays to those three programs total 8.4% of today's Gross Domestic Product. If nothing is changed and if trends continue (big ifs), by the year 2020 -- when your correspondent will celebrate his 74th birthday -- those programs will constitute 14% of GDP and cause a national deficit that will be 7% of GDP. Passell imagines that working people born after 1970 will not be very happy with that arrangement.
Which brings Denis Hayes to mind, because it was Hayes who had the bright idea of forging a direct cause-and-effect relationship between environmental taxes and the funding for Social Security and Medicare. A dollar through a carbon tax becomes a dollar for the elderly. Yoke environmental protection to the boomers' sense of entitlement -- now we're talking.
TODAY ON THE SITE
If you want to learn more about environmental taxation from a man who really knows, check out our High Fives section for Andrew Hoerner's excellent rundown of Website resources on the issue.
5/12: Kids
5/09: Free Trade and Hormones
5/08: Sherry Boehlert, Republican
5/07: Fort Davis, West Texas
5/06: Europe (yawn)
5/05: Divorce, Mothers, Equality
5/02: Killer Grannies and the Highway Bill
5/01: China
4/30: Pity the Mangrove
4/29: Grizzlies off Battery Park
4/28: Mighty Monsanto
4/25: Growth
4/24: Refrigerator Wars
4/23: The Day the Earth Day Stood Still
4/22: Doorman Ecology
4/21: Toyota Steps Out
4/18: Victims of Extremism
4/17: Our White Guy Problem
4/16: Coca-Cola and the Merrit Parkway