Tax-shifting

The objective behind tax shifting is to stop taxing the things we do want (like income and savings) and shift towards taxing things people collectively do not want (like waste and pollution). The current tax system encourages the depletion of natural resources and the unsustainable degradation of the environment, while discouraging job creation. Ideally, a shift toward taxing unwanted effects over desired ones, without increasing the total tax burden, will use market mechanisms to influence and reward more sustainable behavior without more government regulations.

Resources:

Hunter, L. 2009. Tax Shifting. Alternatives, Environmental Ideas and Action. Retrieved March 14, 2011, from http://www.alternativesjournal.ca/articles/tax-shifting

Hartzok, A. [n.d.) Financing Local to Global Public Goods: An Integrated Green Tax Shift Perspective. Earth Rights Institute. Retrieved March 14, 2011, from
http://www.earthrights.net/docs/financing.html

  • megan.crocker

    A good example of tax-shifting is taxes on cigarettes. Formerly, negative externalities from smoking emerged. Smokers cost society more with their health costs than was paid in taxes derived from smoking. A tax shift, in the form of a per-pack tax, is designed so that smokers pay a fairer share of the negative externalities their choices have on society.

    • Tom Munson

      Although that is an excellent example of tax-shifting it is rather disengenuous. The tax money generated from the higher tax should be used only for smoking related damage costs, ( i.e. medical bills or research), or cessation programs. The billions of dollars the cigarette companies paid to the states was used primarily by states for non smoking related issues. It was a windfall of money that got used by states to pay off debt or hire more police and teachers. In the same way increased taxes on cigarettes are not being used on smoking related issues. Taxes on cigarettes have risen over the years and usage of cigarettes is declining, but primarily due to cost not in effective use of the tax money.

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