Sep. 15th, 2005
For as long as I can remember, some of my idle thoughts have swirled around the general theme of the problems in our society and how government and society in general might be restructured to address those problems. Now and then, some of those thoughts have spilled out in things I've written in this journal, and somewhat more often they spill out in face to face conversations, but most of them stay in my head. I sometimes have urges to try to organize them and express them more, but I'm very short on motivation and usually the notion that I should write about something doesn't hold together long enough for me to actually do it.
In the past few days, I find that I've been thinking more obsessively about these ideas, though unfortunately not terribly coherently. My mind jumps from one idea to the next before I've really made any progress on the first, so the body of my thoughts remains a half-formed tangle. But the pressure of the thinking is making me feel more of an urge to express myself. I resolve to try to chase down some of these ideas, squeeze them into something slightly more solid, and pin the results down here in my journal, at least until the urge stops prodding me.
( a plea for comments and some ground rules )
In the past few days, I find that I've been thinking more obsessively about these ideas, though unfortunately not terribly coherently. My mind jumps from one idea to the next before I've really made any progress on the first, so the body of my thoughts remains a half-formed tangle. But the pressure of the thinking is making me feel more of an urge to express myself. I resolve to try to chase down some of these ideas, squeeze them into something slightly more solid, and pin the results down here in my journal, at least until the urge stops prodding me.
( a plea for comments and some ground rules )
Ideas: Appropriate use of taxation
Sep. 15th, 2005 08:48 pmAll of us have our own ideas over just how large the role of government in society ought to be, but nearly all of us agree that government should be doing some things, and that in order to pay for those things, there must be some kind of taxes. Nearly all of us also agree that part of what government should be doing in society is to discourage individuals from activities that are harmful to the rest of society.
Economics tells us that when an activity becomes more expensive, individuals will do it less. Tax policy affects how much certain activities cost, and can profoundly influence behavior. Some commentators consider it wrong to use tax policy to deliberately engineer behavior, but I think this view is both disingenuous and actively wrong. I argue that government has an affirmative responsibility to consider the consequences of tax policy on behavior, and moreover to deliberately try to identify behavior that is harmful to society and tax that behavior roughly in proportion to how harmful it is to society.
I suspect that by specifically taxing products, services, and activities that do harm to society, we could raise enough money that we could significantly reduce the burden that our main revenue generating taxes place on things we generally think of as being good for society, like earning salaries, owning property, and selling goods. I'm not prepared to say that we could actually replace all the taxes we have now with taxes on advertising, pollution, and using up non-renewable resources; nor do I deny that there can be problems with government relying on undesirable activities as sources of tax revenue. I do, however, think it is a sound idea, and I will articulate three principles of good government:
Economics tells us that when an activity becomes more expensive, individuals will do it less. Tax policy affects how much certain activities cost, and can profoundly influence behavior. Some commentators consider it wrong to use tax policy to deliberately engineer behavior, but I think this view is both disingenuous and actively wrong. I argue that government has an affirmative responsibility to consider the consequences of tax policy on behavior, and moreover to deliberately try to identify behavior that is harmful to society and tax that behavior roughly in proportion to how harmful it is to society.
I suspect that by specifically taxing products, services, and activities that do harm to society, we could raise enough money that we could significantly reduce the burden that our main revenue generating taxes place on things we generally think of as being good for society, like earning salaries, owning property, and selling goods. I'm not prepared to say that we could actually replace all the taxes we have now with taxes on advertising, pollution, and using up non-renewable resources; nor do I deny that there can be problems with government relying on undesirable activities as sources of tax revenue. I do, however, think it is a sound idea, and I will articulate three principles of good government:
- Consider taxation first. If an activity by one group is unfairly burdening another group, see if there's a just way for a tax on the activity to pay for the burden. If there's an activity that is tolerable at a low level but becomes detrimental when it is too widespread, see if taxing it can keep it at a tolerable level. Taxation can't help all problems, but when it can, it is likely to be less of a burden on individual freedom than regulation.
- Keep taxes simple (but not too simple). It should not take a lawyer to figure out how much tax you owe, or an accountant to actually pay it. However, the tax does need to remain visible to the person whose behavior it is meant to affect, and directly proportional to their behavior. As an example, imagine a tax on landfilled garbage intended to encourage recycling. Requiring the trash man to sort through the trash he picks up and bill the homeowner $.10 for each soda bottle he finds is ridiculous; on the other hand, taxing the trash company an extra $100 per truckload likely means that they will just raise their flat fee by $1 per household. To have the intended effect, the homeowner needs his bill to reflect each cubic foot that goes on the truck.
- Tax with intent. Government must always consider the effect each element of tax policy has on behavior and society, and intend or at the very least accept that effect. Tradition does not excuse government from this duty; just because we've always had a certain tax doesn't mean we always should. If all taxes are intentional, there will be more argument over tax policy and quite possibly more complaints, but it does not follow that there will be more harm -- if the process works right, there will in fact be less harm.