Review of the Book

Tax Shift
by Alan Thein Durning

Tina Kelley

[Reprinted from the Christian Science Monitor, 8 May, 1998. Tina Kelley writes regularly for The New York Times and Seattle Times]

Northwest Environment Watch, a Seattle-based think tank, has proposed a new tax system to put the financial squeeze on pollution, not people. Tax carbon-dioxide emissions, smog, sprawl, and pesticides, they say, instead of business, income, and sales.

Sometimes an idea comes along that makes so much sense you just want to snap your fingers, turn into the benevolent dictator of the world, and put it in place. But only rarely do such ideas come with operating instructions, small steps to take while the public gets used to change.

Sweden is already implementing similar taxes. In an effort to reduce pesticide use by 50 percent in five years, Sweden has increased taxes to fund antipollution research efforts. And in San Diego a private company built two highway lanes with a scanner toll system for people willing to pay to drive on the less congested road.

Minnesota, Vermont, and Maine are talking about a carbon tax per ton of emissions, and if one or two states go forward, others are likely to follow suit. Existing taxes on the chemical industry could gradually be adjusted to be proportionate to emissions, and business taxes could be lowered accordingly.

The authors of "Tax Shift," Alan Thein Durning and Yoram Bauman, point to taxes that reward the least-polluting fifth of the population with tax breaks, while doubling taxes on the most-polluting fifth. Such taxes could work at the gas pump, where clean-burning fuels have traditionally been at a disadvantage because of their slightly higher cost. Give them a tax break while shifting the burden to the dirtier varieties, and the market will adjust itself accordingly, and cleanly. A similar shift could work on vehicles, with the dirtiest 20 percent paying double sales taxes, while the cleanest 20 percent would be sales-tax free. Such taxes could use existing information - odometer readings, emissions reports - without having to set up whole new bureaucracies.

Northwest Environment Watch points out that our current tax structure evolved from a long tradition of revolts. Realizing it could be hard to get voters to rally behind a huge new tax structure, the authors note smaller steps to a more enlightened code.

Congestion taxes could be phased in one road at a time, with higher tolls on busier roads at peak hours. On a regional basis, taxing land, rather than the buildings on it, could reduce land speculation, sprawl, and the concomitant loss of farmland and open space while encouraging development of vacant urban lots, which already have utilities, public transportation, schools, and easy access to work. And taxing pesticides on a state-by-state basis could result in significantly cleaner waterways and healthier fish stocks.

The proposals could result in a proliferation of new political bedfellows, as they combine traditionally liberal techniques and issues - concern for the environment, fair wages, punishing polluters - with conservative watchwords like reliance on market forces, enterprise, and responsibility. A broad coalition could be built around the proposals, bringing environmentalists together with small-scale industrial polluters who would sign on when they realized drivers of sport utility vehicles would finally have to share some blame for smog over cities.

The tax shift plan carries good news and bad for the average voter. "People get to keep their paycheck, the whole thing," says Mr. Durning. "The bad news is they'll pay more for high impact goods. They'll pay more to drive, and they'll pay more for virgin paper and non-organic food.... We can get prices to tell us the truth about the cost of our actions on others."

And as the report notes, when you tax something, you get less of it. If less pollution, less sprawl, and less congestion are possible under these proposals, it's easier to imagine a populace that is happier about doing its civic duty, pulling together while paying up.