Progressive annual consumption tax?

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Jacob Richter
Progressive annual consumption tax?

Should developed countries replace all their indirect taxes with a progressive annual consumption tax?

Worker movements in the 19th century opposed sales taxes, despite their greater collection efficiency, not because they can be regressive, but because they are not transparent.  They conceal what taxpayers pay to the government, and thus they don't prompt them to regular tax oversight.

Then came the European welfare state.  Economists concluded that even the most progressive of income taxation could collect only so much money.  Collecting money from consumption as well as from labour income, savings, rental income, active business income, dividends, capital gains, and wealth was key.  The question was how to collect money from consumption.  Unfortunately, governments implemented high value-added taxes.  Even the Eastern Bloc wasn't much different in this regard, as they resorted to turnover taxes.

In recent years, business columnists have suggested replacing the income tax with a progressive annual consumption tax. (And I oppose this replacement, of course.)

That said, what if a progressive annual consumption tax were to replace all indirect taxes?  Taxpayers would file and pay this direct tax in a similar fashion to their income taxes, filing an annual tax return:

https://www.forbes.com/sites/timworstall/2014/03/18/bill-gates-points-to...

Mr. Magoo Mr. Magoo's picture

Quote:
That said, what if a progressive annual consumption tax were to replace all indirect taxes?  Taxpayers would file and pay this direct tax in a similar fashion to their income taxes, filing an annual tax return:

Interesting idea.  But how would consumption be documented?

My income is typically documented by my employer, my bank, etc.  But if I go to the bike shop and buy a $2k mountain bike, who would document that consumption, and how?  Or would we all be on the honour system the way (for example) servers are on the honour system to report tip income to Revenue Canada?

voice of the damned

Mr. Magoo wrote:

Quote:
That said, what if a progressive annual consumption tax were to replace all indirect taxes?  Taxpayers would file and pay this direct tax in a similar fashion to their income taxes, filing an annual tax return:

Interesting idea.  But how would consumption be documented?

My income is typically documented by my employer, my bank, etc.  But if I go to the bike shop and buy a $2k mountain bike, who would document that consumption, and how?  Or would we all be on the honour system the way (for example) servers are on the honour system to report tip income to Revenue Canada?

I think you'd have to totally re-work the whole process of buying and selling, so that every transaction is recorded by a central authority. FWIW, this seems to me like a major incursion into traditional notions of privacy, even worse than Facebook spying on your browing history, because nobody really has the option of ceasing purchases.

voice of the damned

Or maybe we'd assume that all money taken out of your bank account is for consumption, and tax it accordingly? For example, if I make two thousand dollars a month, and at the end of the month I have one thousand in my account, we calculate that as a thousand dollars spent, and tax it according to the graduated rate.

Or just get rid of paper money entirely, and make sure all purchases happen with a credit card, debit card, app, whatever, which can be recorded by the government. Youd probably see a pretty big pushback against the abolition of cash, if cash were the only way to duck paying the tax.

 

Mr. Magoo Mr. Magoo's picture

Quote:
Or maybe we'd assume that all money taken out of your bank account is for consumption, and tax it accordingly? For example, if I make two thousand dollars a month, and at the end of the month I have one thousand in my account, we calculate that as a thousand dollars spent, and tax it according to the graduated rate.

Okay, but how, at the end of the year, would we know that I'd spent it?  What if, later, there was an $800 deposit to my account?  Couldn't I say that I withdrew the funds and then redeposited (most of) them?

I do agree, though, that cash would become a pretty lucrative thing.

Quote:
Or just get rid of paper money entirely, and make sure all purchases happen with a credit card, debit card, app, whatever, which can be recorded by the government.

Well, if the government wanted to get rid of panhandling once and for all, that would do it.  :0

Jacob Richter

Mr. Magoo wrote:

Quote:
That said, what if a progressive annual consumption tax were to replace all indirect taxes?  Taxpayers would file and pay this direct tax in a similar fashion to their income taxes, filing an annual tax return:

Interesting idea.  But how would consumption be documented?

It won't.  It's simply the difference.

http://www.slate.com/articles/business/moneybox/2011/12/the_progressive_...

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Families would report their taxable income to the IRS (ideally under a tax code that greatly simplifies the calculation of taxable income), and also their annual savings, as many now do for IRAs and other tax-exempt retirement accounts. The difference between those two numbers—income minus savings—is the family’s annual consumption expenditure. That amount, less a large standard deduction—say, $30,000 for a family of four—is the family’s taxable consumption. Rates would start low and would then rise much more steeply

Quote:
My income is typically documented by my employer, my bank, etc.  But if I go to the bike shop and buy a $2k mountain bike, who would document that consumption, and how?  Or would we all be on the honour system the way (for example) servers are on the honour system to report tip income to Revenue Canada?

Income minus savings equals consumption, as per the above.

Mr. Magoo Mr. Magoo's picture

By "savings" do you really mean "money in a bank"?

What if I keep my savings in a jar?  Or will everyone need to have a bank account, and use it?  Including people who I'm told cannot even vote, because they lack even one of the thirty or so acceptable forms of ID?

This is, as I said, interesting.  But I also have to agree with VOTD, above, that the level of state spying required is a bit unsavoury.  Now they get to monitor my withdrawals and deposits on a daily basis?

Jacob Richter

Mr. Magoo wrote:
By "savings" do you really mean "money in a bank"?

What if I keep my savings in a jar?  Or will everyone need to have a bank account, and use it?  Including people who I'm told cannot even vote, because they lack even one of the thirty or so acceptable forms of ID?

This is, as I said, interesting.  But I also have to agree with VOTD, above, that the level of state spying required is a bit unsavoury.  Now they get to monitor my withdrawals and deposits on a daily basis?

Yes, money in a bank.

As for privacy, this proposal doesn't require that at all.  All that's required on the savings front are ending balances.

Income: CRA gets the info from income tax returns.
Savings: CRA would get balance info on your savings accounts from the banks.

Mr. Magoo Mr. Magoo's picture

OK.  Still an interesting idea.

josh

An oxymoron.

From Forbes no less.

bagkitty bagkitty's picture

Oh why not just microchip the lot of us and be done with it. Clerks can scan the chip to record consumption. I would have suggested tattooing, but I am sure there would be demands for religious exemptions.

6079_Smith_W

No surprise that they buried the lede in this story. I expect this is the bit that really has Gates salivating: No corporate tax. No capital tax.

So we need to move along that spectrum to the more expensive taxes, the ones with higher deadweight costs. And that's where our progressive consumptions tax comes in. We want to get rid of those more expensive ones, on capital, corporations and incomes and move to taxing consumption.

Really, this is nonsense, with no functional difference from taxing income, and we already have a consumption tax; it is called sales tax.

Spending more money isn't in and of itself a bad thing; it is a very good  thing, and ultimately what increases GDP, and employs more people. Given that,  I find it odd that this is something economists favour.

Start taxing people on how much they spend and one big incentive I see is the drive for people to buy cheaper goods, cheaper food, and cheaper everything. Who benefits? The larger corporations that sell things cheaper

The only reason I think someone might fall for this as a progressive idea is the confusion of consumption (spending of money) with consumption of resources. And the false idea that spending more on things is is necessarily wasteful, gluttonous, and using too much. It isn't.

Why is it the only tax not mentioned is the one that WOULD deal with real consumption  - of resources: a carbon tax?

Stephen Gordon

Actually, we already have pretty much the equivalent to a (progressive) consumption tax in place. For almost everyone, income from savings in exempt from tax - accumulated house equity, pension contributions, RRSPs, etc. So what we call income tax is a tax on income that hasn't been saved - that is, consumption.

Sean in Ottawa

Please explain how you make a consumption tax (that is blind to earning) progressive?

Moving on from that, the idea of not taxing savings is problematic. First, if you move your income to spend out of country is it taxed at the border? If so, be prepared for a 20 cent dollar.

If you mean to ignore all earnings not spent -- in other words tax harder the people who only make enough to live -- be prepared for increasing poverty and and greater inequality.

If you tax only what is spent, be prepared for the mother of all depressions as people with lots of money simply wait it out.

Having more than one type of tax can be a way to avoid excesses. It is also easier to design than finding one perfect tax -- so consumption taxes with rebates, property taxes, business taxes and income taxes as well as other duties and taxes is where we are.

I would move to reduce reliance on property tax before doing anything else. It pushes up the cost of housing. Instead replace it with a luxury tax on some items -- including high-value properties. A small civic fee for city services could remain as a tax but be based on income.

6079_Smith_W

Plus all the offloading from the provincial and federal levels have wound up falling on the municipalities. Virtually all our recent cuts here in SK have translated into a massive hike in property tax.

And getting rid of sales tax would be good as well, since it hits you harder the less you earn.

Of course the real elephant in the room is doing exactly the opposite of what Bill Gates wants - restoring corporate tax to a fair rate. Do that, and we wouldn't have to worry about tweaking here and there on everything else.

 

Sean in Ottawa

6079_Smith_W wrote:

Plus all the offloading from the provincial and federal levels have wound up falling on the municipalities. Virtually all our recent cuts here in SK have translated into a massive hike in property tax.

And getting rid of sales tax would be good as well, since it hits you harder the less you earn.

Of course the real elephant in the room is doing exactly the opposite of what Bill Gates wants - restoring corporate tax to a fair rate. Do that, and we wouldn't have to worry about tweaking here and there on everything else.

I have not heard Gates's opinions on corporate tax rates.

There are some issues with consumption taxes that we may want to bear in mind, especially as they are now with us. They are a real attack on the underground economy and many have to pay tax that could otherwise avoid it were it not for this tax. It is hard to say how much money is collected over the table business taxes that would otherwise have been lost without the intrusive sales tax credit system.

Consumption taxes are regressive by nature, but the use of a credit system can make them less so. I think these are not so simple.

Just as I have debated the flat tax issue -- A flat tax can be regressive or progressive depending on how you design it. A flat tax that starts at the first dollar earned as some libertarian's would have would be extremely regressive. Set a flat tax at a high rate and place the basic exemption at, say, 75% of the median wage and do the math, it would be more progressive than the current system. A two tier, almost flat tax would be even better via a surtax on income over $100,000. with the high up front exemption everyone would get, the result would provide similar progressivity to what we get with three tiers below $100,000 in earnings.

 

6079_Smith_W

The quote is from the article, not gates. I don't believe he is opposed to corporate tax, but if he's going to push a dumb idea like this I will make fun of him anyway. If there is one tax which deserves attention, it ain't this one; it is corporate tax.

 

Sean in Ottawa

It may be better to avoid distractions like what to do with consumption taxes and focus more on the declining share and rates of corporate tax and income tax reductions for the very wealthy.

Caissa

This idea is far too intrusive.

Jacob Richter

This thread has veered off-topic.

6079_Smith_W wrote:
No surprise that they buried the lede in this story. I expect this is the bit that really has Gates salivating: No corporate tax. No capital tax.

Like I said, I don't support this tax proposal replacing anything other than the GST/HST and provincial sales taxes.

Quote:
Really, this is nonsense, with no functional difference from taxing income, and we already have a consumption tax; it is called sales tax.

Wrong!

Both the sales tax and this proposal tax consumption.  However, the ordinary Joe doesn't know overall how much in GST/HST and provincial sales taxes he's paying to the government every year!  Value-added taxes and sales taxes are insidious in hiding from ordinary consumers just how much they're paying in taxes!

Sean in Ottawa wrote:
Please explain how you make a consumption tax (that is blind to earning) progressive?

Progressive annual consumption tax is as it says it is.  There could be one tax rate for all annual consumption up to $100,000, for example, a higher marginal tax rate for that portion of annual consumption between $100,001 and $200,000, an even higher marginal tax rate for that portion of annual consumption between $200,001 and $1,000,000, and an even higher rate for that portion of annual consumption above a million.

Notice that the tax is based on Income Minus Savings Equals Consumption, not taxing income, but consumption.

 

Here's the source of my beef with never-transparent sales taxes, VAT, carbon taxes, etc.:

https://www.marxists.org/archive/marx/works/1866/08/instructions.htm#07

6079_Smith_W

If you don't think people pay attention to the importance of sales tax you might want to consider the reaction to governments' changes to it. Reaction which have in some cases forced an overturn, and which historically have been the cause of revolutions. So I don't buy that people ignore it. People are paying very close attention to it in our province right now.
Another problem is that it involves an entire new tax regime on corporations, and if you have people shopping out of province do you send them a tax bill? What about people who spend much of their income out of the country?

We already have what you are talking about in some provinces. If you buy outside and bring something in you are supposed to self assess and pay the government. Part of the reason this is largely unenforced is because governments probably realize how little they would wind up with in the end in having to pay for a Byzantine tax structure like you propose. Fact is, those businesses which currently do that work absorb the cost of most of that bookwork into our bottom line.

And while you might say you agree only in part, it really can't be ignored that most who do argue for this are doing so to offload from the wealthy and corporations. The argument about hidden taxes is pretty thin, and not supported by how people really do react.

Jacob Richter

6079_Smith_W wrote:
If you don't think people pay attention to the importance of sales tax

It's not that we don't because we don't want to.  We don't because we can't.  Does anybody have time to add the GST/HST amounts in all their receipts for the year?  Ditto for provincial sales tax amounts?  I certainly don't!

Why leave this calculation to right-wing think tanks with an agenda, such as the Fraser Tax Institute's "Tax Freedom Day" propaganda?

Jacob Richter

6079_Smith_W wrote:
So I don't buy that people ignore it.

VAT taxes are much higher in Europe, where people over there really, really don't know how much they're really paying in taxes.

Quote:
Another problem is that it involves an entire new tax regime on corporations

So?

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if you have people shopping out of province do you send them a tax bill? What about people who spend much of their income out of the country?

Under this proposal, the banks provide ending balances of consumer and business bank accounts.  It's easy to send consumers the tax bill for out-of-province shopping, because it shows lower ending balance.  Ditto for bigger amounts of out-of-country spending by Canadian residents.

I suppose that, since the existing GST/HST and provincial sales tax regimes have quarterly and monthly filing requirements, the progressive annual consumption tax could become the progressive quarterly/monthly consumption tax for businesses.

Pogo Pogo's picture

Stephen Gordon wrote:

Actually, we already have pretty much the equivalent to a (progressive) consumption tax in place. For almost everyone, income from savings in exempt from tax - accumulated house equity, pension contributions, RRSPs, etc. So what we call income tax is a tax on income that hasn't been saved - that is, consumption.

Hello Stephen,  I remember discussing this a number of years ago, though I cannot find the thread.  I strongly  believe that it has strong merits, though I also would say that transition is tricky.

Do not confuse this with current sales taxes - which are inherently unprogressive.  A universal progressive consumption tax would replace income tax (taxable income x progressive tax rates) with a consumption model where income is reduced savings/investment (taxable income - savings x progressive tax rates). It would need to be combined with a wealth tax (periodic or inheritance) as a consumption tax model does not recognize the value of ownership (income tax is not much better).

In a narrow economic sense it will focus energies on thrift and productivity.  Kardashian lifestyles will be punished while simple living will be rewarded. In the macro view investment will be pushed toward investment and can be focussed (in my view realestate investments would limited).  Moreover saving the planet calls on us to not just switch our energy sources but to reduce our energy usage a tax system that rewards this is a key component.

I don't necessarily agree with all the items on Stephens list, but it points to the transition. However, it is important to identify the serious issue of wealth.  The more the system becomes oriented to consumption taxation, the more important dealing with wealth tax becomes.

Jacob Richter

I don't support this tax replacing income tax, though.

Pogo Pogo's picture

The answer to how to tax is coming up with an array of taxes that achieve tax goals. In addition to fairness and efficiency taxes need to judged on how they affect the economy.  I agree that until a consumption tax can prove that it is fair and efficient, that income tax is needed.

The key thing about global warming is that talking about changing energy sources is only a small part of the solution. We need to reduce our energy usage drastically, and we need to build our societies rules around reducing energy consumption. Discretionary consumption and the production footprint of products for discretionary consumption has to be reduced. 

progressive17 progressive17's picture

I am not sure that consumption in itself is such a bad thing, but it is a bad thing when GHG emissions are increased. Perhaps we should be discouraging the consumption of "dirty" things through taxes on them.

The problem is that a lot of people do not know what is "dirty" and what is "clean". An effective taxing mechanism would help people appreciate the difference.

Mr. Magoo Mr. Magoo's picture

Quote:
The problem is that a lot of people do not know what is "dirty" and what is "clean". An effective taxing mechanism would help people appreciate the difference.

Like "Stewardship Ontario"s disastrous "eco fees"?  Remember those?  Pretty much arbitrary extra fees on things that sound scary, like bleach?

Pogo Pogo's picture

I am going to say that far more important than winning small battles over which hole in the ground we get our oil that we burn is figuring out to how consume less.  So yes, reducing discretionary consumption has to be one of our key goals.

Mr. Magoo Mr. Magoo's picture

Quote:
So yes, reducing discretionary consumption has to be one of our key goals.

Before we roll up our sleeves on that, we'll first need to agree in what consumption is discretionary.

Pogo Pogo's picture

Well in a general sense we can put a dollar value on it.  Pick the StatsCan basket of necessities, or the items identified in the living wage calculation and say that X dollars is non-discretionary.  Above that is discretionary.

lagatta4

That basket doesn't recognize that people have different wants and needs, except for the very basics of food, clothing and shelter (including heating in a cold climate).

Mr. Magoo Mr. Magoo's picture

Quote:
Pick the StatsCan basket of necessities, or the items identified in the living wage calculation and say that X dollars is non-discretionary.  Above that is discretionary.

You'd literally be telling people that their hobbies -- every one of them -- is discretionary.

And in a pure "surviving/not dying" sense, I guess they are.  So, good luck!

Anyway, my point was to wonder whether (say) paper towel is one of those things that we need to crack down on.  If we do, what about kleenex?  We can blow our nose into our hands and then wash our hands, yes?  So if kleenex is on the shit list, what about toilet paper?  Lots of world citizens just use a cup of water.  If toilet paper is on the (forgive me for this one) shit list, what about feminine hygiene products?  Most were only marketed in the last century, so surely they're not necessities, are they?

See where this can lead?

Pogo Pogo's picture

When I was growing up I spent the summers on the farm with my cousins.  Very little money those days.  No kleenex - everyone had a hanky.  They also talked of the days when the Eaton's catalogue was in the outhouse. So yes Kleenex is a choice, so is survival of the planet.

What I trying to say is that fighting over pipelines is looking at the wrong end of the telescope.  We need to develope rules and penalties (the tax system being central) that force us  to make choices.  This is both as individuals and as industry creating products for individuals. We need to start looking in the mirror instead of at the bogeyman somewhere else.

 So yes if your 'hobby' is jumping on a plane and visiting new and exciting places, we need to punish you for your choice.

Pogo Pogo's picture

So let us say that we tell people they are only being taxed initially  (initially  as there would need to be a tax on accumulated wealth) on their income that they have consumed/not saved over $25K and maybe the next $10K gets only a light tax. People can then make those choices - not the government.  In a zero sum situation where someone is consuming $30K, they could choose Kleenex over hankies and pay the tax on the $10 worth of Kleenex they purchased.  

The point is that generally every decision that people make to lower their taxes has benefits to the community at large. It is hard to say that about our current tax regime.

Pogo Pogo's picture

lagatta4 wrote:

That basket doesn't recognize that people have different wants and needs, except for the very basics of food, clothing and shelter (including heating in a cold climate).

Very true. Just like our current tax system is far more complicated than how much did you make - give us a chunk. No reason that the tax reductions for remote communities, disabilities, families and such could not be factored in.

Mr. Magoo Mr. Magoo's picture

Quote:
People can then decide make those choices - not the government.  In a zero sum situation where someone is consuming $30K, they could choose Kleenex over hankies and pay the tax on the $10 worth of Kleenex they purchased.  

As I said, this will all need to be negotiated... or at least ratified.

If I pay more for kleenex because 100 years ago, people made do with hankies, will women also pay more for single-use maxi pads, because 100 years ago, people made do with washable folded rags? 

Again, Godspeed in your attempt to win hearts and minds with this.

The problem here is that people who ride their bike don't think of their bike as a discretionary choice.  People who own and use a dishwasher don't think of it as a discretionary choice.  People who drive their kids to hockey practice don't think of it as a discretionary choice.  What's the plan to win them over?

Pogo Pogo's picture

It is not just the tax, but also the opportunity to avoid being taxed. How does Lagatta annual expenditures on her bike transportation compare to my truck? Is there a problem with her choice getting a tax benefit for this choice?  

Consider the tax as revenue neutral, the ten houses on your block pay the same total amount. Your neighbor on the left makes the same as your neighbor on the right and paid the same income tax.  However one household likes to travel, has a carport full of cars and toys, and has all new clothes of the latest fashion,  while the other household grows a small garden, buys produce in seasons and preserves it, and shops second hand.  When you have them over for a dinner one night the world travellers complain about their tax bill and you point out that they decide how much tax they pay and point to your other neighbor whose taxes have fallen dramatically.  

As a side point I would imagine they both use kleenex and toilet paper, but it is likely that one household uses reusable rags while the other uses paper towel.

Mr. Magoo Mr. Magoo's picture

Quote:
How does Lagatta annual expenditures on her bike transportation compare to my truck? Is there a problem her choice getting a tax benefit for this choice?

I'm sure it compares very well.  But if I buy a $2000 carbon fibre bike, is that a necessity, or a discretionary expenditure?

Quote:
As a side point I would imagine they both use kleenex and toilet paper, but it is likely that one household uses reusable rags while the other uses paper towel.

I guess my point was that for most of the time humanity has been on earth, we've used rags as kleenex, toilet paper, paper towel, and sanitary napkins.  But look how you've already forgiven the use of kleenex and toilet paper.  What is it about paper towel and sanitary napkins that you belive is either more wasteful or less necessary?  And if it helps, I'm not even vigorously arguing -- my point is that this, and such as this, will be the new argument.

Pogo Pogo's picture

Well the tax system is unblinking.  You buy a $200 bike every second year and spend another $100 to keep it on the road.  On top of that you end up driving to work twice as much because the junker bike is slower and breaks down.  If in the end the expensive bike costs less then you pay less tax. If the expense is more, and you just like looking cool, then pay the tax.

Fair point on the paper products. However take a look at it as a process. If the tax is applied progressively then if you are a few bucks into the next tax rate you pay a little higher rate of tax.  So get rid of the ski vacations and replace them with cross country skiing somewhere local, paper products will not be the low hangin fruit.  After a while people will be trained to look for consumption savings.  As people move into lower taxation levels, the tax rates will need to adjust to provide the same level of revenue.

JKR

It seems to me that this proposal is not pertinent since none of the political parties, most importantly the NDP, are discussing this kind of complex idea. Raising income taxes, corporate taxes and carbon taxes seems to be the ideas the NDP, and to a lesser extent, the Liberals are realistically considering.

Pogo Pogo's picture

Stephen Gordon has pointed out that we have taken many steps down this path. The tax free savings account is one in particular. Medicare was a complex idea at one time.

JKR

Medicare was also a mainstream idea in Western Europe brought over to Canada so it was relatively easy to implement. Do any of the social-democratic countries in Europe have a "progressive consumption tax?"

I think almost every progressive idea we are currently considering realistically in Canada is already being done by at least one social democratic state in Western Europe so we are just playing catch-up in Canada when it comes to establishing a more socially democratic society.

In order to have a more social-democratic system we will need higher levels of taxation. Looking at the social-democratic countries of Western Europe it would seem that the higher levels of taxation should primarily come from increases to income tax and value-added taxes. I think an increased carbon tax would be a good fit for Canada.

Pogo Pogo's picture

We are already implimenting steps in Canada.  We don't have to look at Europe.  Put it into google and you will see that it is being discussed the world over (both from the right and the left). I am not holding out hope that our small thinking country will impliment it in full, just saying it is the right thing to do.

progressive17 progressive17's picture

Even a so-called "progressive" consumption tax would be ultimately regressive. The really, really, really rich spend little of what they have, preferring to reinvest their ill-gotten gains. If a billionaire buys a $20 million house, people may say "wow", but as percentage of their wealth it is small beans.

A "progressive" consumption tax would hit the people who must shop for the sake of it, and the idiotically materialistic. These people need our sympathy and love, not more punishment by the government.

epaulo13 epaulo13's picture

What I trying to say is that fighting over pipelines is looking at the wrong end of the telescope.  We need to develope rules and penalties (the tax system being central) that force us  to make choices.  This is both as individuals and as industry creating products for individuals. We need to start looking in the mirror instead of at the bogeyman somewhere else.

..although i agree that some taxes need to happen re climate i disagree with the thrust of this statement: 

1) stopping pipelines directly targets those creating the problem and opens up dialogue for change from the bottom up where change really comes from.

2) trying to do this through the tax system that targets everyone is not identifying what and who needs to change if we are going to avoid catastrophe. it places blame on everyone when in fact it is not everyone creating the problem equally.  see below.

3) the bogeymen are real. and that's where the focus needs to be.

EXECUTIVE SUMMARY

quote:

Rather than attribute emissions to nations, the study aggregates historical emissions according to carbon producing entities themselves. Heede concludes that nearly two-thirds of carbon dioxide emitted since the 1750s can be traced to the 90 largest fossil fuel and cement producers, most of which still operate. online

The research attributes 63 percent of the carbon dioxide and methane emitted between 1751 and 2010 to just 90 entities. Fifty are investor-owned companies such as Chevron, Peabody, Shell, and BHP Billiton. Thirty-one are state-owned companies such as Saudi Aramco and Statoil, and nine are government-run industries in countries such as China, Poland, and the former Soviet Union. The research also classified the 90 entities according to type of fossil fuel extracted and marketed.

lagatta4

Motor vehicles are very heavily taxed in Denmark. I don't know if there is any kind of deduction on this for people who need vehicles for their business; nothing is terribly remote in Denmark, but in the Scandinavian countries farther north there are remote areas where people need motor vehicles.

Idem Pogo and me; I can't imagine Pogo likes going to monster truck rallies, and am sure he owns a truck because of where he lives or the type of work he does. My closest bus stop is two minutes from my house, and I'm ten minutes' walk from the closest métro station.

Pogo Pogo's picture
  1. Income Tax doesn't touch rich people properly.  Never has, never will.  Neither does a consumption tax. That is why I said that a wealth tax was a necessary component.  A consumption tax does not eliminate the ability of imposing other taxes (wealth taxes, carbon taxes).
  2. Attacking individual sources of oil is pretty meaningless. Yes most of the carbon is input at the beginning.  So what.  The reason oil is produced is so it can be consumed. Like the war on drugs attacking a list of producers will not do anything but rearrange the players.  You have to eliminate consumption.
  3. Yes I can come up with reasons for a truck.  Right now it is full of lumber I picked up on craigslist for free. Still if I had to pay a usury carbon tax as well as the marginal consumption tax it would be a consideration.  My Dad quit smoking because of the taxes.
  4. A consumption tax punishes consumption and forces people to question their choices.  Income tax punishes production.  One deters waste the other deters work.  Moreover, there are other goals that can be attacked by wealth taxes, and targeted taxes (ie carbon), it is not a binary choice.
epaulo13 epaulo13's picture

..i'm going to leave this thread before i dig myself in deeper. :)

Jacob Richter

JKR wrote:
Medicare was also a mainstream idea in Western Europe brought over to Canada so it was relatively easy to implement. Do any of the social-democratic countries in Europe have a "progressive consumption tax?"

The point of my original post was that their decision to implement VAT to pay for increased social security was a decision that didn't promote transparency in the tax system.  Tax consumption, perhaps, but not through VAT.

Sean in Ottawa

progressive17 wrote:

I am not sure that consumption in itself is such a bad thing, but it is a bad thing when GHG emissions are increased. Perhaps we should be discouraging the consumption of "dirty" things through taxes on them.

The problem is that a lot of people do not know what is "dirty" and what is "clean". An effective taxing mechanism would help people appreciate the difference.

It seems like what you are talking about is a carbon tax. I think such a thing is a good idea. I agree as well with the concept that it would replace some other taxes and that any policy proposal should define which taxes would be replaced and at what rates.

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