Affect Change

Thursday, July 06, 2006

Incentives and taxes

I was recently reading an article by Dr. Charles Wheelan, an economist who writes a Yahoo! Finance column every month. I really liked his first column on gas taxes and now he's come back with a second one. To summarize: He postulates that taxes are part fundraiser part moral/economic tool (i.e. sin tax on cigarettes). The first column was using a freeway system in San Diego to illustrate how economics can solve some traffic problems which than progressed into how those that use more should pay more. The second column elaborates on that fact. If we want to address our "addiction to oil" (i'm starting to hate that phrase) problem bump up the taxes on something that's optional like, say, driving a big SUV really far to work and something that's (arguably) not like working. I like that idea personally because it would benefit me but it also takes some of the difficult morality of want vs. should out of it. People that like their luxury will pay for it; others won't.

I then started thinking how else could this be effective? What about taxing food. Start adding a small but substantial task to processed/high energy foods like beef, soda, beer, baked goods, boxed foods, highly packaged foods, etc. any thoughts?

I do realize that this is a fallacy. America is too happy with the convenience of cheap energy. I fully admit that I wouldn't want to pay extra for my steak or six pack but I probably would especially if it had some ancillary benefit.

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