Green tax shift Guide, Meaning , Facts, Information and Description
A green tax shift is a fiscal policy which lowers the taxes on income including wages and profit, and raises taxes on consumption, particularly the unsustainable consumption of non-renewable resources.Examples of taxes to be lowered by a green tax shift:
- payroll and income taxes.
- Carbon taxes on the use of fossil fuels;
- Taxes on the extraction of mineral, energy, and forestry products;
- Licence fees for fishing and hunting;
- Specific taxes on technologies and products which are associated with substantial negative externalities;
- Garbage disposal taxes;
- Taxes on effluents, emissions and other hazardous wastes.
Taxes on consumption may take the feebate approach advocated by Amory Lovins in which additional fees on less sustainable products — such as sport utility vehicles — are pooled to fund rebates on more sustainable alternatives — such as hybrid electric vehicles.
The object of a green tax shift is often to implement a "full cost accounting", using fiscal policy to internalize market distorting externalities, which leads to higher efficiency, and sustainable wealth creation.
The policy has been criticised as being neo-liberal for moving the tax burden from the rich to the poor by reducing progressive income tax which emphasise ability to pay and thus tax the rich at a higher rate than the poor, in favour of regressive consumption taxes which tax the rich and poor at an equal rate.
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