Reply #18: Something a sales tax might be good for - pollution

[DaedelusNemo]

In general, i tend more to the notion that we'd be better off without any sales tax at all. But, to consider the possibilities...

There are various ways in which businesses tend to shift their costs onto others. One of those, for example, is pollution. What if you were to assess a pollution tax on items, calculated to represent the cost of cleaning up after the manufacture, use, and disposal of the individual items? It puts that cost right back into the cost of the item which is where it belongs anyway. Instead of deforming the economy, it relieves a deformity. It would give an incentive for people to buy 'green'er products that is exactly proportional to the need.

You wouldn't have to have it as a in-store calculated tax; you could simply require that the producer pay that tax for each item it sells, and the cost would undoubtedly be part of the price they sell it for.

In addition, the tax would be almost entirely under the control of the taxed, a direct consequence of their action. If, for example, they go to the effort of cleaning up after themselves - or simply making less of a mess in the first place - instead of effectively paying the government to do it, their tax would naturally reduce. (assuming they can find a more cost-efficient way to clean it up than the government would use.) For that matter, if they can suggest to the government a cheaper (but still effective) way to clean it up, that would reduce their tax as well. It would be an incentive, for the large-scale polluters, to do research on how to reduce their pollution or clean it up better. It lets the market do its work, while establishing standards.

It is the fairest way i've been able to imagine to handle it.