ecological tax reform theory and reality. education labeling liability regimes regulation voluntary...
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Ecological Tax Reform
Theory and Reality
Education
Labeling
Liability Regimes
Regulation
Voluntary AgreementsPermitTrading
Taxation
environmental taxation
Tax base x Tax rate Tax revenue=
Tax base x Tax rate Tax revenue=
↓
a case study in theory
Tax base x Tax rate Tax revenue=
↓
a case study in tax policy
Tax base x Tax rate Tax revenue=
↓
a case study in politics
Theories
• Pigouvian theory
Pigouvian Theory
tax base x tax rate = tax revenue↓
external cost
Theories
• Pigouvian theory
• Polluter pays principle
Polluter Pays Principle
tax base x tax rate = tax revenue↓
for what?
Polluter Pays Principle
tax base x tax rate = tax revenue↓
external costsrestoration costs
cost required to abate pollution
Theories
• Pigouvian theory
• Polluter pays principle
• Least cost abatement
Least Cost Abatement
tax base x tax rate = tax revenue↓
cost required to abate pollution
Theories
• Pigouvian theory
• Polluter pays principle
• Least cost abatement
• Double dividend
Double Dividend
tax base x tax rate = tax revenue↓
tax rate under another theory that provides sufficient revenue for
tax reduction
The Choice
tax base x tax rate = tax revenue↓
external costsrestoration costs
cost required to abate pollutioncost required for tax reduction
Tax base x Tax rate Tax revenue=
↓
a case study in tax policy
Tax policies affecting the tax base
• Environmental effectiveness
• Administrative feasibility
• Economic effect
Tax policies affecting the tax base
• Environmental effectiveness
• Administrative feasibility
• Economic effect
Tax policies affecting the tax base
• Environmental effectiveness
• Administrative feasibility
• Economic effect
• Equity
Tax policies affecting the tax base
• Environmental effectiveness
• Administrative feasibility
• Economic effect
• Equity
• Still environmentally effective?
Tax base x Tax rate Tax revenue=
↓
a case study in politics
tax base x tax rate = tax revenue ↓
- $$$
+ $$$
Proposed energy incentives
• Wind and biomass -- $1 billion
• Solar -- $71 million
• Alternative fuel vehicles -- $2.4 billion
• Politically easy; fiscally difficult
Environmental tax increase
Dedicated revenues=
How to spend the money?
Deficit reduction
Other tax relief
Where is the political will?
Effective fabric or the emperor’s new clothes?
The evidence to date
Tolerance Principles
• Iterative approach
• Best available alternative
• Cost allocation ethic
• Educational function
Effective fabric or the emperor’s new clothes?
Ecological Tax Reform
Theory and Reality
Education
Labeling
Liability Regimes
Regulation
Voluntary AgreementsPermitTrading
Taxation
U.S. Taxes in 2000
• $2 trillion federal tax revenues
• $540 billion state tax revenues
• $332 billion local tax revenues
• Total -- $2.9 trillion
Taxation -- and Environment
Taxation Environment
•
Environmental Taxes
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