Saturday, May 23, 2009

Let's combine a consumption tax, a Carbon Tax, and a health Care Plan!

Let's combine a consumption tax, a Carbon Tax, and a health Care Plan! A Carbon tax or carbon cap and trade discriminates against our own industries including one such as the one just passed in the House Energy Committee. Economist Article We tax the producers in our country. It does not consider embodied energy in imported goods. For example, it takes a lot of energy to produce a PC. Ditto for environmental taxes. Dr. Raymond McDermott a former Economics Professor here at my Western Illinois University found that countries that have strong environmental standards suffer in the import factor (the pollution haven factor) (http://academics2.vmi.edu/ECBU/MacDermottRJ/research.htm) and the Walmart effect is at least as much do to finding countries with lax environmental regulations as their cheap labor. Also, see "Unmasking the Pollution Haven Effect" in International Economic Review, Volume 49, Issue One, Page 223 to 254 February 2008. Companies in the United States that provide their workers health care are at a competitive disadvantage. We have all heard that $1500.00 is added to the cost of a car built in the United States because of worker's health care costs. Each good or service receives a tax that reflects 1) how much carbon it produces to the atmosphere 2) how much conventional pollution 3) how they treat their workers including paying health care, occupational safety, and providing stable employment. 4) how need the good is. (Basics like carrots and unadorned underwear get a lower tax than luxury goods and sugar pop.) Firms go before a jury of randomly selected citizens. (We have plenty of unemployed citizens who have the time to hear these). They assign a tax based on all factors. To encourage competition, the firms are grouped by type (cars, clothing, restaurants, etc.) and would be encouraged to compare how they treat their workers and the environment with the competition. Those firms that are relatively better pay little or no tax with the tax burden falling on those goods/businesses that are bad for the environment. A consumption tax can be organized as a sales tax (the fair tax) or a system where we look at each person's income and savings and then they can bring their receipts to get a refund back. (Credit cards now give one an organized method of totalling one's expenses. The stores can send through a UPC number and business back to the Credit card, which can arrange for the Cash back. A Universal Credit card comes to mind here.)

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