Green Taxes

Abstract

In the past 25 years we have substantially increased taxes on labor and modestly increased taxes on income while allowing pollution and resource depletion to remain largely untaxed. The result is that we have created a tax system that encourages resource depletion and discourages investments in machinery and labor. A worldwide discussion is taking place about how to move away from taxing "goods" like investments and employment, that is, activities we would like more of, and toward taxing "bads", like pollution, that we would like to discourage.