By Robert Repetto, Roger C. Dower, Robin Jenkins, and Jacqueline Geoghegan
Washington, DC (January 1, 1992)- This brief demonstrates how shifting the tax burden can reduce environmental damages, increase economic production and income, and increase economic welfare overall. The authors estimate the economic gains from shifting a significant chunk of the tax burden from income, profits, and payrolls onto congestion, pollution, and waste generation.
Taxes, as the saying goes, are inevitable. But what governments tax is by no means inevitable. Today, the federal government relies largely on personal and corporate income taxes, and increasingly, payroll taxes (Social Security and Medicare). State and local governments also impose such taxes, along with sales, excise, and property taxes.
About the Green Fees Initiative
The federal tax code can have a significant impact on the environment. Fiscal policy is used to encourage as well as discourage various business activities and consumer decisions. These activities affect the environment and human health by influencing how much we consume, how we use natural resources, and how much pollution is released into our air and water.
The President’s recent call for tax reform and the presence of persistent budget deficits provide opportunities for policy makers to consider changes to the federal tax code that could lead to not only greater fiscal responsibility, but also improved human and environmental health.
The World Resources Institute’s Green Fees initiative seeks to identify and analyze a portfolio of tax reforms that would be both fiscally prudent and environmentally sound. WRI and partners will educate policymakers, interest groups, and opinion leaders in order to build support for these measures.
The portfolio of reforms WRI will address include:
* Eliminating existing tax expenditures that forego revenue and that encourage activities reducing the quality of our air, the cleanliness of our water, and the abundance of our natural resources;
* Introducing environmental charges on pollution and waste to discourage environmental degradation, stimulate technological innovation, and improve the federal budget situation.
For more information, visit the World Resources Institute.