Resource taxes (instead of a carbon tax)

To me, allowing our industries and technology to continue to release potentially harmful emissions into the environment, even with a carbon tax as a deterrent, doesn't seem like a deterrent at all. It almost seems like a government would be saying "Go ahead, continue to pollute. We'll just tax you for doing so." It seems like hush money to the government to keep quiet about things. We need to take a more punitive approach to emissions, and not just let industries and ourselves keep producing waste, especially when that waste can actually be turned into something useful. Think of it like this: Before you got a compost bin, you likely just threw away food scraps into the trash. Now you recycle the food scraps. Why can't we do the same thing with petroleum emissions and other societal "wastes"?

The natural world doesn't throw away anything, never to be used again. We should not do that, either.

Resource taxes: My alternative to income tax

Everyone hates tax. The rich hate tax because it "takes away my hard earned money".

The working poor hate tax because it hurts their ability to buy everyday essentials. Those in between these two extremes hate tax for any number of reasons, from the fact that it cuts into their ability to achieve the North American dream, to the complex tax code that goes along with it. But we all have to pay tax.

This is my plan to tackle the concerns of every socioeconomic group.

Income taxes and consumption taxes are often called regressive when they appear to more severely impact lower-income earners. This is a common criticism of the flat tax. I do agree with it on a basic level. If a person earns $10,000 in one year, and is required to pay 10% of that earned income to the government, it will have a much more significant impact on that person than the person who earns $20, $50, or $100 thousand.

Ontario, and by extension Canada, have a basic personal exemption level of income which is allowed to be earned without having income tax applied to it. I would like to model my community of Star Island's income tax model on that, but only if it proves to be the most favoured solution of the populace. I do believe that there are other ways that a society can tax its workforce which will not seem so punitive to those who would suffer most.

Consumption-based taxes would tax us on the money we spend, as opposed to the total money we earn. This might sound like it benefits those with higher incomes.

However, I believe that the worries of a lower-income person can be minimized if the resource tax approach was handled properly, by channelling those taxes into programs that lower-income individuals would use. This is the kind of policy that a social democracy espouses, and it is one that I happen to agree with. In addition, supplemental income grants could be provided to low-income families. I detail this in my spreadsheets, under four sections:


1. Program development
These are employment supplements for low-income families. In the event that company X does not provide a family with a sufficient amount of income, programs would be in place to provide supplemental income to these families, in order to meet a sufficient standard of living.

2. Education grants would be provided for post-secondary education to students wishing to study both in Star Island and abroad.

3. Small business grants will enable entrepreneurs to realize their dreams, just as I did with my own small business, which has operated since 2005.

4. Disability accommodation grants

On the other end of the scale, if a high-income earner uses up a lot of resources due to an extravagant lifestyle, they will be taxed accordingly, with that money going to the public good. It is a principle that I believe people on either end of the political spectrum can agree with: Use more resources, and you pay more for that use.

As far as tax evasion is concerned, it would be a non-issue in Star Island. All records of earnings would be filed electronically, with the appropriate levels of tax levied immediately – ensuring that nobody would be able to illegally dodge taxes they owe to the government.

Here are the resource taxes that Star Island would impose on its citizens and corporations:

Resource tax #1: Water

I believe that water is a fundamental human right, and should not be considered a commodity in its own right. Local water treatment and distribution networks should be able to provide at least 99% of a citizen's water supplies, with for-profit water companies making up any difference. With that in mind, in Star Island, control over water would belong to the government at large, which is in turn controlled by its citizens. The rate you pay for tap water would be in line with municipal water prices in Canada.

(About $3-4 per 1000 L). Effectively, this would be a monthly utility bill, rather than a tax. By making this utility government-owned, it benefits the entire community, rather than simply the shareholders of a water provider.

Resource tax #2: Power

An industrialized society demands access to reliable, renewable, and environmentally friendly electric power, in sufficient and consistent supply to meet the demands of its population. Star Island would generate 99%+ of its electric power via renewable energy resources, in order to maintain a consistent and affordable rate for residents and businesses.

Water and power bills would be built into the cost of rent/mortgage payments on Star Island. 

Resource tax #3: Fossil fuels

This tax is perhaps the most punitive; however, I feel that making it the most punitive is the correct thing to do, as fossil fuel consumption is one of the greatest drivers of human pollution to the natural environment. Star Islanders would be encouraged to severely limit their consumption of fossil fuels and derived products from petroleum, in lieu of more environmentally friendly alternatives – most of which would be produced locally, therefore also providing employment opportunities.

The tax would initially be $10/kg of mass for the fossil fuels. To put this in perspective, for 1 L of unleaded gasoline, which on average has a mass of .51 kg, the tax would be $5.10 per litre. This is magnitudes higher than the price most people pay at the pump in North America, and for good reason. It will discourage us from continuing to rely on a continuously dwindling resource, which also rapidly degrades our ecosystem through its use.

Star Island will be a compact community. Most citizens will have no need to use a car to go about their daily business, as work, school and home will all be within walking distance. Even when you need a way to transport large amounts of goods from one place to another, electric vehicles of appropriate size, including personal shopping carts, will be preferred over gas-using cars.

Resource tax #4: Algae fuels

Algae fuels are my preferred solution for the machinery which still requires a liquid-fuel based source of energy to run them. Algae-fuel is carbon-neutral; Burning it may release carbon into the atmosphere, but it is this same carbon which the algae need to grow again. To further reduce the amount of emissions that may be released into the atmosphere, I would recommend that a device be attached to the tailpipes of any vehicles which use liquid fuels. This device would capture the emissions, and allow them to be converted back into a useful product, such as algae feed.

Algae fuels would be taxed at $1/kg at the outset.

Resource tax #5: Metals

We extract countless different types of metals and other minerals from the ground beneath us. Instead of this being one specific rate, there would likely be many specific rates, depending on the rarity of the material, its inherent toxicity or danger to the environment, and/or its demand. For the purpose of simplicity in my spreadsheets, I have set an average tax rate on metals at $1/kg for individuals (who are unlikely to be using large amounts of precious metals), and $10/kg for businesses and industries.

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Hopefully, these taxes will serve as effective replacements for the spate of taxes currently in place.