What a Green Economic Policy Looks Like
TAXES AND SUBSIDIES? NO! DIVIDENDS FOR CITIZENS INSTEAD
by Jeffery L. Smith
Do taxes really get the rich to pay their fair share? Are taxes really needed to fund necessary government? The answer to both is "no."Rather than try to take from the rich/give to the poor, we can recover and share the social surplus that now only the rich receive, thereby making themselves rich. And instead of using taxes to fund government, we can use a combination of fees and dues.
The problem with taxes is two-fold; they violate both equity and efficiency. Taxes are unfair in that quid pro quo is distorted; the person paying is not the person benefitting. Each year, tax law exempts more wealth and income than it collects. If your exemptions total less than the tax you paid, then tip your hat to those few for whom their exemptions were much more than their tax liability. Taxes are wasteful in that they must make goods and services more expensive. The extra expense in turn motivates people to invest less savings and employ fewer workers. Minus taxes, our economy could be about one fifth bigger, or leisure could be 20% longer.
Taxes also obscure a forgotten truth -- the commonwealth. Society need not take the values that private individuals produce with their labor and capital. Society need only tap the values that society itself generates -- the market value of land and resources and the electro-magnetic spectrum and of the permits that government grants (charters, waivers, franchises, patents, licenses, leases, titles, etc). The amount of money we spend on nature and permits, directly and indirectly, totals several trillions each year. It's enough to fund the basic services of government, and to pay citizens a dividend.
To collect these public values, we can forego taxes and instead charge fees to users of infrastructure, dues to claimants of land, and "tariffs" to recipients of government permits. The amounts of these fees, dues, and tariffs would be set by bidders in a free and open market. And instead of using these collected "rents" to fund anything from social security to corporate welfare, we could instead divide them equitably among ourselves, paying ourselves a Citizens Dividend.
Like taxes, subsidies too are both unjust and inefficient. Corporations grossing billions still get huge handouts while the poor get crumbs. And getting a subsidy masks the true cost of exploiting the environment and overworking human beings, while administering all these programs requires an enormous bureaucracy that costs more than the actual benefits paid out. On the other hand, a straight dividend to citizens is equitable to all and cut-rate cheap to administer, as is the Alaska oil share.
Now, while taxes and subsidies are a reality and dues and dividends still our worthy goal, the Green Party endorses the on-going efforts to shift taxes from goods to bads, and to shift subsidies from bads to goods. That is, to de-tax homes, payrolls, and useful enterprise while up-taxing locations, extraction, and pollution. Similarly, we would de-fund militarism, criminalization of benign drugs, and dependency on autos while ensuring public health and safety are sufficiently funded.
Our underlying dictum is, "pay for what you take from our common inheritance, not for what you make with your individual talents and efforts." And echoing every thinker from Solomon and Confucius up to Paine and Jefferson and beyond, "the worth of Mother Earth belongs to us all."
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Jeffery J. Smith is President of the Geonomy Society. This article has also appeared in the newsletter of the Simple Society.
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