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  • Unknown Member

    Deleted User
    June 25, 2008 at 2:17 pm

    By internalizing externalities via a pollution tax, people, pursuing their own selfish interests, end up pursuing the interests of the world.  Without such a tax, decisions are generally rational (within the limits of people’s knowledge) but selfish.  With such a tax, decisions are generally rational, but rational for the whole world instead of rational for only that individual.  The money raised, if it represents the true cost of cleaning up the pollution, should be adequate to cure the harm caused by the pollution that was taxed.

    If you have a problem with sticking the poor with too much tax, why not couple a pollution tax with counterbalancing grants?  Then the poor are motivated by the tax to cut down where they can, but they have the money to afford what they need.  The more energy stingy among the poor make money off the deal.  Those who are energy hogs pay a penalty.  But as a class, the poor are not stung anymore than the rich.  There are simple things the poor can do, such as take the bus instead of driving an old gas guzzling smoke belching car, that can help the environment and reduce the demand for gasoline considerably.  A grant to the poor coupled with a pollution tax is a great way to enlist the aid of the poor.  It is also a great way for the poor to make money.  A poor person who, for example, decides to takes the bus instead of drive, would in effect be paid to do so, because the grant money he receives would exceed the fuel taxes he would have to pay if he drove his car.

    Because the poor can not afford efficient equipment, they tend to cause a lot of pollution per unit of economic activity.  It is important to provide incentives to reduce this pollution.  Taxation in proportion to the extent they pollute via energy sales taxes is the best way to do this.

    A pollution tax is much simpler than hundreds of different incentive programs for various types of energy efficiency technology.  There are no forms to fill out.  You don’t have to be savvy about the latest governmental grants.  You don’t have to meet strict guidelines to qualify.  You don’t have to wait for  rebate check.  You don’t have to use the government’s obsolete preferred technology.  If you are a provider of technology, you don’t need to get “approved” for rebates.  There is no lag while the government is educated regarding the latest technology.  There is no argument about how much one technology should be favored over another.  All these kinds of decisions are efficiently handled by the marketplace.

    All a person needs to do is take the current price of different forms of energy in his purchasing decisions.  This is what people do anyway.  The only difference is that the price would include the marginal cost of cleaning up the environmental damage related to use of that particular energy.  In a particular locale, only a dozen or less entities would have to calculate, collect and pay the various taxes.  Most of these entities already collect some form of sales tax.  The extra manhours required to administer the program is therefore almost nothing.  Some of the entities that would collect the tax would include: the electric company, gasoline stations, natural gas suppliers, bottled gas suppliers, coal suppliers, firewood suppliers.

    The net effect on the free market is that there is efficient allocation of energy resources.  Alternate energy systems are installed where it is most economical.  Energy economies are achieved where there is the greatest pay off.  And all this is done without corrupt government bureaucracy.  All the federal government needs to do is impose acurate pollution taxes and enact anti-NIMBY legislation.