Free Market Ecology
“Economics” is based on the assumption that people act in ways that maximize their wealth as individuals. It holds true for many situations. All else being equal, we’ll buy products at the best price we can get them and take the highest wage we can find. The assumption is that we act out of selfishness—and economics is just its rational application. Under the laws of economics, we wouldn’t pay for the same book twice.
An ecology, on the other hand, though wildly competitive and occasionally just as cruel as any economy, is based on interdependency. The members of a coral reef or slime mold know how to take coordinated action when it’s called for. The shit of one organism is fertilizer for another. An ecology still operates under the assumption of maximizing wealth, but of the whole collective organism —and over time.
-- Douglas Rushkoff on the Light at the End of the Reality Tunnel
I had a similar discussion with a friend today over lunch. We were talking about how levvies can be used to create environmental/social outcomes via the market apparatus itself. e.g. the EU car emission legislation will create a market - a very competitive market - in low emmission cars which can be used to "offset" the carbon emissions of sports cars. Or how a HealthCare Tax on Big Tobacco could be used to recoup health costs but also make them pay for the true cost of their product, which is currently being picked up by the welfare state.
Pure conjecture - I wonder if you could reduce income tax considerably and and increase rely various "social taxes" to generate income for the state?
posted by stu willis at
1:24 am
8 Comments:
well the introduction of GST was supposed to enable a wild slashing of income tax, the shortfall thereby created offset by the revenue created by the new tax on services. but that was never going to happen fully of course, especially after all the exceptions to GST were thrashed out. so we never quite got to trigger's much-touted 'user pays' system.
can you rely on the revenue created by social levies. well, you have to balance your social engineering aims with your economic aims. by that i mean you have to hope that the levies will not dissuade people too much from paying for what has been levied else your revenue base will shrink, unless the people can't really do without the goods and/or services in question. right? well at least that's peter debnam's view today vis a vis a cooling property market. he used the ill-fated exit taxes on property (vendor duty) as an example. nobody wanted to deal in real estate anymore. of course he ignores a few other potent forces but hey. (sorry, i just checked the time - he held that view yesterday, strictly speaking.)
so if cigarettes are an essential/unavoidable, and for some they seem to be, the example you provide might work - people will buy them seemingly at any price. but if you accept that the effect of taxing non-essential things is to cool activity thereto related then maybe revenue will shrink with it. and so relying on it is perhaps not possible.
and if levies are shown not to substantially change our behaviour, are we just a uniquely economically/socially stubborn people? looking forward to a combined australians are pr*cks/technology rant in the near future stu. perhaps the effect australians being pr*cks has on our research and uptake of important technology, not just on media. i know you are itching to do some serious conflating together with some solid australia-bashing.
(incidentally, you wonder how the state government can find ways to spend so transparently the masses of money it receives each year. not only does it get its commonwealth grants but it also directly takes in huge sums from stamp duty on the sale of land amongst other things.)
insomnia is a hell of a drug. i'm rick james b*tch. insomnia is a hell of a drug.
By
Angry Dave, at Tue Jan 16, 02:25:00 am AEDT
Social and environmental taxes are regressive Stu you right wing b@stard.
Sorry, couldn't resist...
Social levies have existed in Australia for years in the form of "sin taxes" on smoking, gambling and alcohol.
Gambling taxes fund quit lines (ironically) and clubs pump money from the pokies into local community sport and activities. Smoking and alcohol taxes help to fund the public hospital system for when the users become sick.
It is debatable whether they have any effect on demand, however that is not their overriding aim.
Environmental taxes are a newer concept but are definitely the way forward - these things are best left to (albeit manipulated) market forces. There are several examples going around (e.g. the fed govt's Renewable Energy Credits or RECs). The only argument for not having environmental taxes is that they impair international competitiveness, although if you adopt that argument Australia would never have become a leading advocate of free-trade policies.
These sorts of taxes reduce the level of income tax required but obviously not completely, assuming you want to maintain a progessive tax system.
By
Anonymous, at Tue Jan 16, 06:56:00 pm AEDT
I think what I'm proposing is a more thorough/equitable relationship between (say) the monetary cost of smoking and the amount of money raised via taxes on smoking.
Ideally, if you're relying on the revenue of social taxes to replace income taxes than you have a vested interest from not dissuading people from that taxed behaviour. ie if you tax industry to ostensibly pay for the environmental damages they you shouldn't also use that money to pay for other things. It needs to be directly proportional or your engineering a situation where you rely on behaviour your trying to curb.
So, in short, I don't think you can replace social taxes with income taxes. But nor should you make income taxes "pay" for damage which should be recouped from elsewhere within the system.
As for the Australian's being pricks thing. Maybe. I think I have more of a problem of Australia as an insitution rather than a culture per se.
That, and I don't like seeing my country being ruined by fucking ring-in 20th Century Immigrants.
By
stu willis, at Wed Jan 17, 01:22:00 pm AEDT
If they stopped bombing my country I'd go home immediately!
By
Angry Dave, at Wed Jan 17, 06:13:00 pm AEDT
1. GST Schmeesssty. Big government, big income taxes, big Liberals. We have a surplus. Yay!
2. The utopia of a user pay system is hogwash.
3. Better a balance between social levies and income tax than social levies and no income tax. Or no social levies and high income tax.
4. I'm with Stu. Though perhaps he's suddenly had this brainwave about who pays for what because he's quit smoking, and wants more money.
5. Trigger, are you defying Winston Churchill and Mark Twain, and moving to the left as you age?
6. I would rather have fucking ring-in 20th century immigrants than Peter Debnam as NSW Premier - http://www.peterdebnam.com.au/images/stories/tour/day5_surfbig.jpg
By
Damien, at Wed Jan 17, 10:29:00 pm AEDT
This comment has been removed by a blog administrator.
By
Damien, at Wed Jan 17, 10:31:00 pm AEDT
You were nicer before you went away Damo :p
Give me the 16% Hong Kong tax rate any day.
By
Anonymous, at Thu Jan 18, 05:42:00 pm AEDT
If users *don't* pay, then who should?
Someone has to...
By
stu willis, at Mon Jan 22, 04:32:00 pm AEDT
Post a Comment
<< Home