Why have a Green Tax Shift?
Our present economy places too low a price on many goods and services because the future consequences of consumption of these goods and services is not reflected in their price.
Free-Market economic systems only price things appropriately if all of the costs associated with a good or service are encapsulated within its price. The Free Market breaks down where:
- Coal-fired power station operators can dump harmful CO2 into the atmosphere at no cost.
- Farmers can produce meat and fibre from ruminant animals without regard to these animals methane production.
- Manufacturers can produce products that later will damage the environment or public health without having to pay for these costs.
- Logging companies can cut down trees without having to pay for the loss of water and other damage that this creates.
- Companies can dump pollutants into the sea or land and not pay for damage this creates. (E.g. Gunns pulp mill, desal plants, etc.)
One solution for these problems is for the owner of the damaged resources (the people) to levy a compulsory charge (tax) on these activities so that the market price properly reflects the actual cost of the activity. Another is to totally prohibit the activity altogether. This may be appropriate in some circumstances but in most would cause unacceptable economic dislocation.
Making it Revenue Neutral
As shown on the Tax Reform Home page the shift to Eco-Taxation should be fully revenue-neutral - so there is no net impact on the economy, employment or Australia's competitive position. In fact our competitiveness is improved due to the removal of so many bad taxes like Payroll Tax.
Making it ProgressiveEco-Tax reform can be progressive if the package contains:
- Eco-Tax Rebate: This is a monthly lump sum payment made to non-earners on the back of other existing payments. The amount is to be determined by considering the average financial impact of Eco-Taxes on non-earners in the recipients area. This means non-earners have a strong incentive to stay 'below average' compared to their peers in their area with regard to water and energy use.
- Raising the Tax Free Threshold: This means many low-income earners will not pay any income tax. (See also TFT page.)
- Removing Fixed Charges: These are associated with connection to the service being taxed that do not relate to quantity of the service being used. (I.e. Water, Gas or Electricity service charges, or 'drainage rates', etc.)
Australia faces huge problems in securing adequate water which will only get worse as Climate Change accelerates. However, current water pricing is far too low to make spending on conservation sensible for most consumers.
Currently State governments (particularly Victoria & Tasmania) do not charge enough for logging licences. This has led to large scale extraction of timber for low-value uses such as wood-chips. A Federally applied tax on logging can resolve this, reducing logging and increasing water flows to rivers.
This should be applied to pollution from:
- Pulp mills.
- Desalination plants.
- Other inadequately taxed sources of pollution.
Non-Recyclable Goods Tax
This should apply to goods that are difficult to recycle at end of life or have inadequate warranty periods. For example:
- Car tyres.
- Non-rechargeable batteries.
- Fluorescent light globes containing mercury.
More New Car Stamp Duty on Inefficient Vehicles
The best time to encourage vehicle efficiency is at the point when the new car enters the vehicle fleet. To this end new vehicle stamp duty should be reformed to encourage vehicle efficiency. To keep it revenue neutral taxes on efficient vehicles should be reduced and tax on inefficient new vehicles increased. Electric cars might be tax-free.
Care needs to be taken to design a scheme that considers efficiency / capacity not just efficiency. Thus we encourage the most efficient passenger car, the most efficient people mover and the most efficient 2- tonne truck.
No Rates or Land Tax on 'Land For Wildlife'
All private land that is set aside for native vegetation and wildlife should be tax free. The land would
need to be protected from stock and vehicles and kept reasonably free of introduced species. To be completely
tax free the reserve would need to link up with neighbouring reserves and be a public foot way. (Land owners
could capitalise on this by providing accommodation near such private trails. Legislation should strictly limit
the land owners liability for injury in the reserve.)
The Carbon Tax Center
For more great information about the benefits of Carbon Taxes visit the Carbon Tax Center.
- Debunking the Myths.
- Cap & Trade Problems.
- Winning Arguments.
EU carbon price collapse
26th Jan 2013: Over allocation of permits causes the EU carbon price to plummet. This shows a carbon tax is better than a complex and fragile carbon trading regime. Article.
Big Coal still rules
6th Sept 2012: New research proves that dirty coal power plants will be grossly over compensated under the carbon tax. Article.
Julia triples the TFT!
1st July 2012: Julia's carbon tax more than triples the Tax Free Threshold from $6,000 to $18,200. This is major tax reform! Article.
Labor's Carbon Tax
13th Aug 2011:
Taxing carbon better
13th August 2008: An ETS seems to have been accepted, but a carbon tax might be a better solution. more...
No to Carbon Trading
15th July 2008: ONE of the world's best-known economists, Jeffrey Sachs, has warned Australia against using an emissions trading scheme to tackle climate change, saying it would never win global support....Professor Sachs said the concept was "highly disliked" by China and other developing countries, and they would never agree to it. more...
G-8 Climate Failure
10th July 2008: India and China rejected the Group of Eight's declaration on climate change yesterday as leaders of the developing world demanded that rich countries should take a stronger lead on preventing global warming. more...
Petrol $8 Litre by 2018
11th July 2008: PETROL prices could reach $8 a litre within a decade if oil production peaks and Australia is not ready to shift to alternatives, according to a CSIRO analysis. more...
British Columbia's Carbon Tax
26th Feb 2008: British Columbia will implement a carbon tax of $10 per
metric ton of carbon dioxide on July 1, rising in $5 / tonne annual increments to reach $30 in