I believe that taxes can assist the transformation to the economy and society that we need if we are to avoid catastrophic environmental change. That is why I have been writing about what I am calling Tax to Save the Environment (TASTE). I stress, I do not think tax is the only way to achieve this: regulation will usually be required as well, but tax has powerful signalling capacity both economically and socially, and I think that is vital at present. I do therefore offer another suggested tax now.
In 2015 I suggest a Carbon Usage Tax (or CUT) in my book The Joy of Tax. I explained this in my White Paper on Scottish Taxation for Common Weal in 2017 as follows:
OK, tax something you get less of it. With you so far.
And the tax proposed is a bank account transactions one. Idiot idea of course.
But we are here talking about a tax to discourage carbon emissions through consumption. Again, fair enough. Then as a justification we get:
It would capture non-consumption expenditure, which is very largely not liable to VAT and other indirect taxes at present;
But we’re trying to tax the consumption which leads to carbon emissions. The very power of the tax is that it only taxes consumption which leads to carbon emissions. Thus incentivising people away from such, that is in fact the power of such taxation.
So, which idiot decides to extend such a tax to non-consumption?
Ah, yes, it’s one of Spudda’s ideas, isn’t it? Expecting logic through 5 paragraphs is hoping for too much.
Interestingly, what is it that we call non-consumption expenditure? Largely, savings. So, he wants to tax savings in order to reduce consumption.
Jeez, and to think that he’s employed to teach economics.