Sensible taxation strategy

Reward the good behavior, penalize the bad- that’s management 101. Unfortunately, the American economic ecosystem isn’t sensible, rational or working very well for most of us.

What passes for debate is more like a game of “gotcha” than a discussion of the merits and failings of our systems. Instead we talk about irrational ideas like the “Flat tax” that are just as regressive as the current system.

My discussion partner, Greg Hunter, forwarded me this post from the Arch Druid Report” blog that I found fascinating. The comments are good too- and I highly recommend you head over and spend some time reading it- but here is the meat of this postulate on a better tax strategy:

The primary economy, which is nature, and the secondary economy, which is the production of goods and services by human labor, are subject to negative feedback loops that tend to hold them in balance. The tertiary economy, which is the exchange of money and other forms of abstract wealth, is subject to positive feedback loops that drive it out of balance in ways that unbalance the other two economies as well…

The taxes on natural goods and services follow the same rough line of logic as property taxes do at present. The federal government, as trustee for the American people, already effectively owns all the real estate within its borders – when you buy property, what you’re buying is the right to use that property within the limits of the laws and the national interest, which is why China can’t just contract with private landowners to buy a couple of disused fishing harbors on our west coast as bases for its navy. The same principle could reasonably apply to every other resource in the country. When you pump oil from the ground, you’re depleting part of the patrimony of the American people, and you should have to pay the government for that privilege. When you dump smoke out of a tailpipe, equally, you’re using the nation’s atmosphere as the gaseous equivalent of a landfill, and once again you should have to pay to do that. Every natural resource of every kind would be subject to the same sort of tax.

Now of course this would mean that the prices of many goods and services would go up considerably. Since everyone would have the money they wouldn’t have to spend on income and sales taxes, this may be a little less of a burden; but the crucial point is that people can avoid resource taxes by their personal choices. If you buy a hybrid car, you’re going to pay a lot less in petroleum tax, and a lot less in tailpipe tax as well – though the extraction taxes for the rare earth minerals in the batteries and electronics may set you back a bit, as they should. If you don’t own a car at all, you laugh all the way to the bank. Similarly, the price of a product made from metal mined from the earth includes the extraction tax for the mining, but the price of a product made from recycled material doesn’t; thus the manufacturer has a big incentive to use the recycled material and undercut the competition….

A tax code that burdens the secondary economy – which is the economy that actually produces goods and services, remember – while encouraging the wasteful plundering of nature and the bubble-blowing antics of the tertiary economy is not going to help us weather the storms of the near future. A tax code, any tax code, that does the opposite – that makes it more profitable to employ human labor to meet human needs, and less profitable to disrupt the natural cycles that undergird our survival or to feed speculative excesses that pump imbalances into an already troubled economy – could be a very helpful asset in a time of crisis, and could be put in place tolerably easily, without having to tear an entire society to pieces and rebuild it from the ground up.

via The Archdruid Report: Immodest Proposals.

It’s the basis for today’s Dayton Grassroots Daily Show- which we just call “Taxation”

We share these discussions with you to try to get you to share your thoughts with us- and to stimulate out-of-the-box new thinking in our community. We believe that the same kind of original thinking that put Dayton on the map- will be the same thinking that brings prosperity back to our community. It’s just going to take a lot more of you watching, sharing and commenting.

Enjoy!

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