Pushing an environmental tax.

• Author: Brown, Lester R.
• Position: Environmental protection

UNLIKE WE AMERICANS, several European countries are benefiting from a steady decline in income taxes as governments lower taxes on income while rinsing them on environmentally destructive activities. The purpose of this shift is to incorporate the environmental costs of products and services into the market price, thus reducing energy use.

Among the various environmentally damaging activities taxed in Europe are coal burning, gasoline use, the generation of garbage (so-called landfill taxes), the discharge of toxic waste, and the excessive number of cars entering cities. Germany and Sweden are the leaders of this movement. A four-year plan adopted in Germany in 1999 systematically shifted taxes from labor to energy. By 2001, this plan had lowered fuel use by five percent. It also accelerated growth in the renewable energy sector, creating some 45,400 jobs by 2003 in the wind industry alone, a number that is projected to rise to 103,000 by 2010.

In 2001, Sweden launched a bold 10-year environmental tax shift designed to convert 30 billion kroner ($3,900,000,000) of taxes from income to environmentally destructive activities. Much of this shift of $1,100 per household is levied on cars and trucks, including substantial hikes in vehicle and fuel taxes. Electricity is being taxed more heavily as well. This restructuring is an integral part of Sweden's plan to be oil free by 2025. Among the other European countries with strong tax reform efforts are Spain, Italy, Norway, the United Kingdom, and France.

There are isolated cases of using taxes to discourage environmentally destructive activities elsewhere. The U.S. imposed a stiff tax on chlorofluorocarbons to phase mere out in accordance with the Montreal Protocol of 1987 and its subsequent updates. When Victoria, the capital of British Columbia, adopted a trash tax of $1.20 per bag of garbage, the city reduced its daily trash flow 18% within one year.

Cities that are being suffocated by cars are using stiff entrance taxes to reduce congestion. First adopted by Singapore some two decades ago, this tax later was introduced by Oslo, Melbourne and, most recently, London. The London tax of 5 [pounds sterling], or nearly nine dollars per visit, first enacted in February 2002 by Mayor Ken Livingstone, was raised to 8 [pounds sterling] in July 2005. The resulting revenue is being used to improve the bus network, which carries 2,000,000 passengers daily. The goal of this congestion tax is a restructuring...