Environmental Tax Reform in Lester Brown's Plan B 2.0

Scott Hollis
August/September 2006

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According to Lester Brown, president of the Earth Policy Institute, we should lower income tax rates and raise taxes on environmentally destructive activities such as burning fossil fuels, generating garbage and discharging toxic waste. This will incorporate the social costs of destructive products and services into the marketplace, thereby creating incentives for more reponsible environmental actions.

Known as 'environmental tax reform,' shifting taxes to reward environmentally responsible behavior (and punish those who act otherwise) is becoming popular in several European countries.

In Germany, a 1999 tax reform shifted taxes from labor to energy consumption. By 2001, this plan lowered fuel use by 5 percent and accelerated growth of renewable energy, creating 45,000 jobs by 2003 in the wind industry alone ? a number that is projected to rise to 103,000 by 2010. In Sweden, a tax restructuring plan will help the country become oil-free by 2025 by increasing taxes on cars and trucks, and electricity and fuel taxes.

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. Some 2,500 economists, including eight Nobel Prize winners in economics, have endorsed this concept. By incorporating the true cost of environmentally destructive practices into our tax code, we can create jobs while rewarding people and companies that behave responsibly.

To learn more about environmental tax reform, pick up a copy of Brown's book Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble at MotherEarthShopping.com, or read an excerpt from the book online.







Post a comment below.

 

Walter Jeffries
8/18/2006 12:00:00 AM
I agree, lets eliminate the tax on income because that is discouraging productivity and simply encouraging fancy lawyers and accountants ploys.But you can't successfully tax the garbage because then people just dump it on the sides of the road. We have this problem now. People would rather dump their bags of garbage on our property than go to the dump and pay $3.50 per bag to legally dispose of it.The solution is to put a tax on all sales. Part of that would really be a tax on disposal. Pay at the pump, store, etc. All sales should have some tax to replace the income tax. Environmentally damaging sales, like gasoline, could have higher sales taxes.A sales tax is a fair tax because people who spend more pay more. If it replaced the SS tax ( a joke tax if there ever was one), etc then it would help discourage wasteful consumption while encouraging productivity and place the burden primarily and the largest consumers, the rich, who can afford to pay the most.Another tax that needs to be worked on is the Real Estate tax. Our schools are paid for by this unfair tax that punishes owning more than minimal land. The result is land gets developed because we can't afford to keep paying taxes on it like it was condos. The whole 'valuation at best use' is terrible because building it all up into business or homes is NOT best use. Educational spending should not be funded by real estate taxes and real estate taxes should be minimized - what other investment are you taxed on at the purchase, every single year you own it and at the sale - absurd.








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