VT green tax shift common asset fund

VT Green Tax Shift & Common Asset... WHAT ARE GREEN TAXES?"PAY FOR WHAT YOU TAKE, NOT FOR WHAT YOU MAKE" "TAX WASTE, NOT WORK” Tax Nature, NOT Labor or Capital •Environmental protection

VT Green Tax Shift & Common Asset

“There is nothing more difficult to carry out, more doubtful of success, nor more dangerous to handle, than

to initiate a new order of things

For those w ho w ould institute

change hav e enemies in all those

w ho profit by the old order, and

they hav e only lukew arm defenders

in all those w ho w ould profit by the

WHAT ARE GREEN TAXES?

"PAY FOR WHAT YOU TAKE, NOT FOR WHAT YOU MAKE"

"TAX WASTE, NOT WORK”

Tax Nature, NOT Labor or Capital

•Environmental protection

•Economic Efficiency

•Using market incentives

Survey-EU Green taxes

EU Types of Green taxes

NW GREEN TAX SHIFT

Inventory of NE GREEN TAXES

NE GREEN TAXES

VT Taxes-2004

buildings-NICU

Other fees

Tobacco Products Other general taxes

TOTAL AIR AND WATER TOTAL WASTE

TOTAL CHEMICALS

Speculative Gains Tax current use property land-NICU

Cigarette Beverage

Property Transfer Tax

Meals & Rooms

Corporate Income

Telephone Property

CURRENT VERMONT GREEN TAX ES

GREEN TAX PRINCIPLES

What is the goal of government?

What is the goal of taxation?

Can they be combined?

Potential market good (Tragedy of the “non-

commons”) but inefficient:

patented information,Pond, roads (congestible),streetlights

Pure Public Good:

climate stability, ozone layer, clean air/water/land, Biodiversity, information, habitat, life support

functions, etc

Open Access Regime: (misnamed: Tragedy of the commons)

Oceanic fisheries, timberetc from unprotected forests, air pollution, waste absorption capacity

Taxation + Provision of Public

Goods

Taxation Public Goods

GREEN TAX PRINCIPLES

1.Internalize external costs 2.Behavioral Approach

3.Revenue Generating

EXTERNAL COSTS?

ECONOM Y

POLLUTION

PRICES LIE

Vermont GPI study

GDP AND HAPPINESS

TAX ON BUILDINGS - production cost

S

1

D P

S 1 P

cost

Inelastic demand-gasoline (few subs.)

S

1

D P

Elastic demand-movie (many subs.)

S

1

D P

S 1

tax

S 2

p2

TAX ON LAND - no production cost

D P

TAX ON LAND - no production cost

TAX ON LAND - no production cost

D P

as possible, captured natural resource rents for public

Green tax increase How to spend the money?

Dedicated revenues: ~$5 Million Deficit reduction: none in VT

Other tax relief: ~$500 Million

3 Revenue Generating

GREEN TAX CRITERIA

1 ECONOMIC EFFICIENCY

2 DISTRIBUTIVE EQUITY

3 ENVIRONMENTAL PROTECTION

4 EASE OF ADMINISTRATION