Tilted Forum Project Discussion Community - View Single Post - PUB DISCUSSION Taxes to discourage certain behaviors

braisler · 03-31-2009, 07:16 AM

The issue for me is of two parts. Positive for the use of tax to shape behavior. Negative for the ability of government to manage the tax responsibly.

I would like to see taxes used as a means to shape behavior in both positive and negative direction. Economists smarter than me have shown this to be one of the most cost effective way of changing behavior. That is, carbon-tax versus EPA trying to monitor and regulate industrial pollution. The former is a much more simple way to get the company to change their carbon footprint. The latter has a much higher cost to both the taxpayer and to the company. I also support tax breaks/incentives to encourage growth and investment by individuals and companies, for example, in sustainable energy to stick with a similar theme.

I honestly don't have too much worry over taxation being used to shape individual behaviour, re: porn, fast food, sugary soda, etc. Maybe I'm naive, but I just don't see legislation like that actually moving forward. Who knows, the Christian lobby is so powerful in this country, maybe they could push through a tax break on attending church... oh wait, that already exists.

One of the main problems that I see with taxes being used to discourage certain behaviors, is that the tax will just drop into the bottomless pit that is our government's yawning, hungry mouth. It is extremely unlikely that the extra taxes will be used for what they were intended, or that they will offset some other area of taxation. More likely, is that the extra tax revenue will be used to fund some ridiculous pork project or congressional junkets to Thailand.

I'm reminded of the early days of state lotteries. I live in Florida at the time that they were pushing the idea of starting a lottery there. They sold the idea, and sold it hard, with the promise that every dollar that the lottery raised would go to funding education. How can you argue with that? Everybody likes kids, wants them to get a better education, right? Well, what they didn't say was that they were going to use the extra cash from the lottery to take state tax revenues away from funding education and spend it somewhere else. The net benefit to education was exactly zero.

I worry that taxes used to shape behavior would be used in exactly the same way. Get some extra tax to fund program A, remove existing funding for program A, redirect that funding to unrelated program Y.

03-31-2009, 07:16 AM	#38 (permalink)
braisler Addict Location: Midway, KY	The issue for me is of two parts. Positive for the use of tax to shape behavior. Negative for the ability of government to manage the tax responsibly. I would like to see taxes used as a means to shape behavior in both positive and negative direction. Economists smarter than me have shown this to be one of the most cost effective way of changing behavior. That is, carbon-tax versus EPA trying to monitor and regulate industrial pollution. The former is a much more simple way to get the company to change their carbon footprint. The latter has a much higher cost to both the taxpayer and to the company. I also support tax breaks/incentives to encourage growth and investment by individuals and companies, for example, in sustainable energy to stick with a similar theme. I honestly don't have too much worry over taxation being used to shape individual behaviour, re: porn, fast food, sugary soda, etc. Maybe I'm naive, but I just don't see legislation like that actually moving forward. Who knows, the Christian lobby is so powerful in this country, maybe they could push through a tax break on attending church... oh wait, that already exists. One of the main problems that I see with taxes being used to discourage certain behaviors, is that the tax will just drop into the bottomless pit that is our government's yawning, hungry mouth. It is extremely unlikely that the extra taxes will be used for what they were intended, or that they will offset some other area of taxation. More likely, is that the extra tax revenue will be used to fund some ridiculous pork project or congressional junkets to Thailand. I'm reminded of the early days of state lotteries. I live in Florida at the time that they were pushing the idea of starting a lottery there. They sold the idea, and sold it hard, with the promise that every dollar that the lottery raised would go to funding education. How can you argue with that? Everybody likes kids, wants them to get a better education, right? Well, what they didn't say was that they were going to use the extra cash from the lottery to take state tax revenues away from funding education and spend it somewhere else. The net benefit to education was exactly zero. I worry that taxes used to shape behavior would be used in exactly the same way. Get some extra tax to fund program A, remove existing funding for program A, redirect that funding to unrelated program Y.