Raise Green Taxes, Lower Others

Sure we need green taxes.  But that’s not a green light for the Government to dip its fingers even deeper into our wallets and purses. Britain is already one of the highest taxed countries in Europe, and heading up while others are heading down. If the Government can’t get by taking over 40% of all the wealth the private sector creates, we should get a new Government.

Yes, it is possible that the earth is warming. Only possible, not certain. And yes, it is possible that our cars, factories, TVs and fridges are contributing to the problem. Not certain, just possible. But we are not certain that we will be in a car accident, and we still buy insurance. So the possibility that the earth is warming, and that we are the cause, should be enough to make us buy some insurance. Especially if at the same time we can reduce our dependence on oil from countries that use our money to finance terrorism.

Environment secretary David Miliband has a bunch of very sensible taxes in mind. Make carbon emitting cars more expensive to drive and over time we will buy cleaner ones. Tax electricity guzzling fridges and we will buy more efficient ones. Make polluters pay, and they will pollute less.

So far, so good. But at the same time the Government should lower other taxes. It doesn’t need more money. Yet  as it prepares to rake in  millions in green taxes, it talks about taxing that new porch on your house, or making you pay extra for living in a neighborhood with good schools and clean streets, even if that means you are already paying more on the value of your house. In fact, if Gordon Brown had kept his promise to rein in the waste at the NHS, the Government could be making do with less. Other Governments, as worried as Gordon Brown says he is about international competition, are actually lowering taxes so as to attract businesses, including some of those considering fleeing Britain.

So raise green taxes, but lower NICs. That will clean the air, but also increase incentives for businesses to create jobs and workers to put in a few extra hours because they can keep more of their money. Raise green taxes, but also get the lowest paid workers out of income tax entirely. Raise green taxes, but also reduce the taxes on small businesses, so that the man or woman with a good idea can keep more of the money earned if the risk is rewarded with some profits.

In the long run, if the green taxes are levied in the right places, they will change the way we live. We will use less energy from polluting oil, and the take from the taxes will go down. But that will take decades. The average car now lasts for about fifteen years, so the switch to cleaner ones will take time.

When we have all become good, clean consumers, green taxes won’t produce much revenue. But if we cut the other taxes that are holding back our economic growth, by then the economy will have grown enough to produce plenty of tax revenues for even the greediest chancellor -- without any big new taxes.   

Comments

[Stephen Lucas]

I think you have made some very excellent points.

I am in the US, and I think we are too heavily reliant on income taxes. As the population ages, there will be less labor in the workforce. The government also taxes other factors of production - land through property taxes and capital through capital gains taxes. The truth is that there are social costs to being relient on the combustion engine and unhealthy lifestyles, so I would not mind a green tax. But I would want a lower income taxes, perhaps a flat tax on income, investments and property - not necessacerily all the same rate.

I think if the governemt does not lower taxes and is collecting too much money, this could create a drag on the economy and the efficiency within its own economy.

Thanks for your post.

From Houston, TX -

Stephen