Editor’s note: Guest contributor David Kershner is a land conservation consultant who did research for Sightline’s book Tax Shift.
In case you haven’t noticed, environmental tax shifting is receiving national attention, thanks in part to Al Gore. Last month Gore gave a speech at New York University in which he proposed replacing the payroll tax with a carbon tax .
Last week Time Magazine columnist Joe Klein wrote that he asked Barack Obama “why [Obama] didn’t support an energy-tax married to tax relief for working Americans” in a recent speech to members of MoveOn.org. Klein refers to it as Gore’s “tax swap idea.” Obama responded later in the interview that, “It’s a neat idea. I’m going to call Gore and have a conversation about it. It might be something I would want to embrace.”
Meanwhile, former World Bank chief economist and Nobel Prize winner Joseph Stiglitz has been promoting tax shifting as part of his current book tour. In an interview on KUOW’s The Conversation about two weeks ago, Stiglitz lent his support to the idea and said that leaders of the Conservative Party in Britain are now talking about the benefits of lower taxes on labor and higher taxes on pollution.
From the October 25 issue of The Guardian:
On Conservative plans for ensuring how yet-to-be-defined [carbon reduction] targets were met, Mr Cameron reiterated that his own party was committed to rebalancing the system through a system of “taxes on things that are bad,” such as pollution, and [“]tax reductions on things that are good,” such as free parking for battery-operated cars.
Maybe tax shifting’s time has almost come?
Reward the good, tax the bad, amen! Of course, the progressive/regressive issue makes it more complicated (e.g., OR’s income/labor tax vs. WA’s sales/consumption tax), but a carbon tax could be structured to be effective and fair without unduly burdening those who can least afford to change (and providing the right incentives for the rest of us).
If tax shifting’s time has come, then the next big argument as the legislation is formulated will be the “revenue neutral” aspect of the new taxes. Every legislator’s promise to the citizens is that the new taxes will not result in the Government collecting any more or any less tax money. But that is a tricky thing to guarantee. How much carbon do we actually produce? And who is liable for it? How do you measure it? Corporate America will want to make sure that their taxes actually go down under any new system, and uncertainties in answering questions such as those above will give them the chance to make that happen. We need to start arming ourselves with a serious and specific carbon production inventory. We shoudl get the DOE or the EPA to start working those things now before this gets in the political klieg lights and is subject to undue influence by the powers that be.
We could also cut demand for fuel by filling in cities. Owners do turn vacant lots and abandoned buildings into useful structures where gov’t shifts the property tax off buildings, onto land.