When looking at the policies that have been suggested after the Great Recession it seems clear to me that they do almost nothing about the fundamental problems that have come to light in the last few years. We have a financial system that is dangerously large and largely unsupervised, we have stagnating real wages for the vast majority of Americans, we have looming environmental problems that are best dealt with in the short term, infrastructure that is in need of immediate repair, and finally a federal debt that will be a problem in the next few decades. In all of these areas the solutions proposed, and usually rejected, are of modest scope, and that is if we propose anything at all.
The reasons for this are both ideological and practical, which I admit does not bode well for the future. Environmental destruction, financial instability, and fiscal collapse are undeniably important issues and we need focus our vision on the crafting economic and social systems that are going to allow for increased growth and development in the future. With that in mind I would like to propose a change in tax policy that I think would have far reaching effects on the environment, the debt, and wage stagnation.
Put simply, it is gradually moving from taxing income, investment, profits, sales, and jobs to a tax on negative externalities in almost all their forms. This is a idea that I first read about in The Ecology of Commerce by Paul Hawken, and Natural Capitalism by Paul Hawken and Amory Lovins and L. Hunter Lovins. If you would like further details I highly recommend reading these books. In short the plan would tax all nonrenewable resource use, non-sustainable renewable resource use, as well as waste in the system in all its forms. Since this is an incredibly regressive way to tax society, so low income individuals would have their average (or perhaps use wighted) share refunded back to them.
The benefits of this plan are many, though the central feature and selling point is that it taxes unproductive economic activity. It also helps deal with three of the issues in the top of this post; by putting a tax on environmentally harmful activity it helps curb not only greenhouse gas emissions, but also the wide array of destructive human practices that causing untold damage in our natural world. It leads to a huge reinvestment in business as they redesign their systems of production and distribution, leading new jobs as things are reused and recycled rather than being thrown away. While it also helps the budget by cutting down on the pollutants in the environments that can cause adverse health outcomes for individuals and communities.
So while this is only one idea, and an infeasible one at that, I think with popular support it is the kind of idea that could get traction in a decades time.
