Ecological Consumption Taxes:
Essential to Meeting the Challenges of the 21st
Our hearts tell us what we should do. Prices tell us what we will do.
The principle is clear if
we want to make economic growth
mean ecological improvement, not ecological destruction. This is the practical
definition of sustainability in the 21st century
More pollution must mean a decrease in
the rate of profit. Less pollution must mean increasing profits. Polluting goods
will lose market share. Non-polluting goods will gain market share.
We need to tax consumption, not income. Pay taxes on whatever we buy or use. More pollution, more tax.
Lower pollution, less tax. Ecological consumption taxes can enlist the invisible hand of Adam Smith in the cause of ecological sustainability. The market means are at hand
to lead to sustainability and prosperity.
In his book Markets, Democracy & Survival Roy Morrison presents a detailed plan for an ecological value added tax to be
phased in to replace all income tax (personal, corporate, and payroll).
An average 18% ecological value added tax, or E-VAT, can replace all U.S. government taxes on income, fund the federal
budget, and get the prices right by raising taxes on more polluting goods and
services. The more polluting, the higher the E-VAT tax rate, and the lower the rate of profit.
The regresive effects of ecological
consumption taxes can be remedied by a negative income tax to hold harmless, for example, the 40% of U.S. households with lowest household income.