What The Polluter Pays Principle Implies
Is it consistent to believe in both the Polluter Pays Principle and in taxation of income or sales?
by Hanno Beck
Dinner has ended. Over a cup of tea, Sara is talking with Vernon:
"... and so those new policies are justified because of the Polluter Pays Principle."
Vernon says, "Tell me one more time, what the Polluter Pays Principle is."
Sara replies, "The polluter is responsible for the environmental and economic effects of his or her polluting activities. That's all. For instance, if you pollute a river and someone downstream gets lower-quality water, or must buy more expensive water as a result, you owe compensation to them. It's obvious."
But Vernon says, "It is not obvious to me. I do not agree with the Polluter Pays Principle. Why does it have to be the polluter's problem when he causes damage to the life or property or rights of others? Maybe it should be all the taxpayers' problem, or only the problem of people whose names start with the letter K."
Now what is Sara supposed to do? What can you do, when somebody says they don't agree with something that seems obvious to you?
Some people might try to find a more general way to phrase their idea. Maybe you can find a broad idea that implies or "includes" the Polluter Pays Principle. Then Sara can try to get Vernon to agree with that more general phrasing. If Vernon likes it, then Sara only needs to point out that the Polluter Pays Principle follows from it -- is entailed by it. In this less direct way, she will have convinced Vernon (if Vernon is rational, which he is).
Sure enough, this is what Sara tries to do. "Well, would you agree that if you produce an item worth a dollar, and somebody else does pay a dollar for it, then the dollar ought to come to you and no one else?"
"Certainly," says Vernon. "Anything else would be unfair."
"You're right, and the reason for that is that you own the fruit of your labor -- goods and services that you produce belong to you, and so they are yours to keep or to sell. Does that sound right?"
"Yes," replies Vernon. "If I don't get the fruit of my own labor then I am a victim of robbery or slavery. Of course, it can get a little complicated. Say I produce a child's toy with the aid of a hammer, then the owner of the hammer is also entitled to a portion of the toy's value."
Sara says, "Of course. People who contribute their labor, or their belongings, to the production of goods and services then rightfully own those goods and services. They usually make agreements and contracts ahead of time to sort out who gets how much, so that they don't have to fight or go to court."
This seems fine to Vernon. "Right," he agrees.
"Well then," Sara continues, "how about if you produce something worth minus one dollar. Let's say it is a bag of trash, or a waste chemical. Now isn't that also yours? And if it costs someone a dollar to dispose of it safely, or to recycle it, then shouldn't that dollar come from you and no one else?"
"Ah," says Vernon. "I see what you mean. I have to pay for the effects of my polluting actions or else I'd be robbing someone else. Okay, I believe the Polluter Pays Principle now."
"Great," exults Sara.
"But the funny thing is, you don't really believe it yourself," says Vernon. "You aren't being consistent. You say goods and services that we produce belong to the producers and no one else. But you support the income tax and the sales tax. Those taxes take away from the producer, without his or her consent, part of what he or she produced. So it doesn't seem that you really believe your own claims. Why should people support the Polluter Pays Principle that says they are stuck with negative products they produce, when at the same time you wouldn't allow them to keep the positive products they produce? Sounds like an uneven deal."
Sara is shocked. But she has to admit Vernon has a point. "Hmm, I guess this might be part of why the Polluter Pays Principle doesn't excite as much support as it should. If we lived in a world where people get to keep the full value of whatever their labor and their investment yields, then pollution would stand out in sharp contrast, as a crime against innocent people and their property. The Polluter Pays Principle would be totally obvious then."
"And instead," says Vernon, "we're surrounded by cases of theft by income tax, by sales tax, and so on. Well then, no wonder people aren't shocked when the Polluter Pays Principle isn't applied. And no wonder some people don't even see the wisdom of it. "
The bottom line question is this -- can a person support the Polluter Pays Principle and support involuntary taxation both, or is that inconsistent? Your opinion, please!
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