“Tax bads, not goods”
“Tax bads, not goods” is a saying that has been printed on many gift items, such as T-shirts and buttons. American ecological economist Herman Daly of the University of Maryland has used the term “tax bads, not goods” since at least 1997.
A well known tax principle is that when you tax something, you get less of it. Income is a good thing; taxing income discourages work. Pollution is a bad thing; the theory holds that taxing this “bad” will result in less pollution. There are obvious advantages to “tax bads, not goods,” but also obvious disadvantages—it encourages a black market (such as a black market against cigarette taxes), it discourages both good and bad (an industry might travel overseas to a less-taxed jurisdiction, causing a loss of jobs and income), and it raises prices for the consumer (as a tax on existing coal plants would).
Wikipedia: Herman Daly
Herman Edward Daly (born 1938) is an American ecological economist and professor at the School of Public Policy of University of Maryland, College Park in the United States.
He was Senior Economist in the Environment Department of the World Bank, where he helped to develop policy guidelines related to sustainable development. While there, he was engaged in environmental operations work in Latin America. He is closely associated with theories of a Steady state economy.
Environmental Research Foundation
#570 - Some Guiding Principles—WW III, Pt. 4, 29-Oct-1997
Published October 29, 1997
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Tax Bads, Not Goods
Herman Daly[2] and Paul Hawken3 also agree that we should tax the things we don’t like—depletion, pollution, and waste—and we should avoid taxing the things we DO like, such as investment and labor. (We would still have to tax the highest incomes to reduce inequalities of opportunity and power, for the purpose of preserving democracy.)
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[2] Herman E. Daly, BEYOND GROWTH (Boston: Beacon Press, 1996).
[3] Paul Hawken, “Natural Capitalism,” MOTHER JONES (March/April, 1997), pgs. 40-53.
Google Books
Earth Odyssey:
Around the world in search of our environmental future
By Mark Hertsgaard
New York, NY: Broadway Books
1998
Pg. 305:
The basic idea, as economist Herman Daly has put it, is to “tax bads, not goods.” That is, raise taxes on the things society wants to discourage — natural resource use, environmental degradation, and pollution — while lowering taxes on things it wants to encourage—employment and business investment.
Pg 360 (Notes):
Daly’s “Tax bads, not goods” quote came in an interview with the author, but he has argued the case for environmental tax reform in detail in numerous articles, including “Ecological Tax Reform,” Herman E. Daly and John Duffy, Perspectives in Business and Global Change, 1996, Vol. 10, No. 2.
Google Groups: alt.politics.socialism.trotsky
William Kaufman
11/7/99
Canada’s Green Platform
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Tax Bads NOT Goods
The Green Party suggests shifting taxes away from personal income and onto non-renewable resources, and eliminating taxes on ecologically benign products and processes. Green taxes reward sustainable businesses and penalize resource-intensive industries. Reducing income taxes and payroll taxes makes people less expensive to employ.
22 March 2000, Philadelphia (PA) Inquirer, “Property taxes help cause sprawl, group says Pennfuture, an environmental advocacy organization, wants taxes on pollution and waste disposal instead,” pg. B1:
The aim of the PennFuture tax plan would be to “tax bads, not goods,” the group’s president and chief executive officer
30 January 2001, Altoona (PA) Mirror, “Targets tax reform,” pg. A4, col. 1:
“Green taxes tax bads, not goods. They shift taxes off of work and onto waste. With a Green tax system, you pay what you take, not what you make,“she said.
grist
9 Apr 2003 3:05 AM
Ecological economist Robert Costanza puts a price tag on nature
By Lissa Harris
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Costanza would like to see governments adopt more of such taxes, along with eliminating what he calls “perverse subsidies” from which society derives no benefit. “Tax bads, not goods,” he says. “You could reduce taxes on labor and income, things you want to support, and increase taxes on things you want to discourage.”
Google Books
Ecological Economics:
Principles and Applications
By Herman E. Daly and Joshua C. Farley
Washington, DC: Island Press
2004
Pg. 145:
In bumper sticker form: “Tax bads, not goods!” The bads are depletion and pollution (throughput), and the goods are value added by labor and capital, that is, earned income.
Google Books
Ecodynamics:
The Prigogine Legacy
By C. A. Brebbia
Southampton; Billerica, MA: Wit Press
2012
Pg. 104:
Taxing what we want less of (depletion and pollution), and ceasing to tax what we want more of (income) would seem reasonable – as the bumper sticker puts it, ‘tax bads, not goods’.
Reuters
Apr 12, 2012
8:54 pm EDT
Posted by TheOldSodbuster
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Unpopular as Hermann Daly’s dictum has been for the last 40 years: ‘Tax Bads, not Goods’, it is still a wise vision. Tax what we do not want. Tax what harms us. Oh but this would take a rational and deliberative legislature. What was I thinking?
Canada Free Press
One Born Every Minute: A Primer On Carbon Taxes
- Institute for Energy Research Tuesday, July 10, 2012
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Yet the proponents of a carbon tax try to turn this analogy on its head, by saying the government should “tax bads, not goods.” In other words, they recommend implementing a revenue-neutral carbon tax, in which the government reduces economically inefficient taxes (such as the income or payroll tax) and replaces the lost revenues with a tax on what they have decided are socially harmful activities, such as carbon dioxide emissions. Thus we allegedly kill two birds with one stone: We reduce the threat of manmade climate change, while reducing the “deadweight loss” currently generated by taxes on labor or capital gains.