Greening The Budget

A detailed Summary of Greening The Budget

Earning a Double Dividend in the Process

Q1. How Do you reconcile the introduction of environmental-based tax rate differentiation as well as new environmental taxes with the traditional objectives of fiscal reform: tax simplification, fiscal neutrality (not affecting behavior)?

A1. This has to be done very carefully, as introducing new taxes that are related to the environment, can dramatically affect people's behavior. If you levy new taxes on vehicles that produce high amount of pollution, like Sport Utility vehicles people are no longer going to purchase those vehicles. This tax is something that has to be eased on to the public and the public has to be educated as to how these environmental taxes will work. The bottom line is that the public needs to be educated as to why these taxes are being levied.

Q2. With the exception of a lump-sum tax, all conventional taxes have distortion cost in the form of affecting the taxpayer's economic behavior: work-leisure choice, consumption-savings allocation, etc. Wouldn't environmental taxes have the same dead weight loss by affecting consumption and production behavior?

A2. These taxes would not be a dead weight loss because after the public was educ

A12. These environmental taxes must be slowly introduced to the people, through billboards, commercials and editorials that describe the condition of the environment, The after this has been established these can be followed by a campaign on how to reduce pollution and increase the well-being of the environment. This campaign can be the base for the introduction of the new taxes. Once people know of the state of the economy, they may be more willing to accept these new taxes.

A3. The general public are those who will benefit from these new taxes, due to the fact that pollution will be reduced and the environment will become cleaner and a better place to live. This tax also improves income distribution, and will be distributed proportionally across the board. It will also improve the environment by saving money and realigning polices that are setup as an incentive to practice environmentally sound practices. This is set up to improve economic efficiency and reduce waste that is produced by public and state enterprise. The distributional cost will be addressed through a proportionally distributed tax, and not a disproportion tax that benefit the rich.

Q12. How do you make the introduction of environmental taxes socially and politically more acceptable? How do you ensure public and political support? In other Words, How might environmental taxes be introduced with the minimal amount of resistance and disruption?

Q8. What is the preferred type of environmental Taxes? What determines the choice between direct taxes (on emissions) and indirect taxes (on products and inputs)?

Q4. How do you address International competitiven

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Approximate Word count = 1104
Approximate Pages = 4 (250 words per page double spaced)

Category: Politics