I was kicking around the idea of pollution taxes being collected, and instead of offsetting other taxes or used in the general revenue, being divided amongst all US citizens.

I would have air pollution taxes collected & distributed nationally, and have ground & water pollution taxes collected & distributed regionally.

Some pollutants would have a per-unit tax assessed, others where science or treaty could determine an 'acceptable' level would use tradeable permits, though with companies purchasing these permits rather than being given them by the government.

I don't really have a clue how much revenue these would generate, at a relatively modest $50B, every citizen gets $167 a year. Those industries that pollute will become more expensive, while those who don't will become relatively less. By definition, the average consumer will exactly break even, while those who consume fewer than average (~$37,000) polluting products would come out ahead.

Would such a tax, and dividend, be a good idea for the US?


Extra credit:
Additionally, market auction of resource rights could be divided similarly: Oil, Coal, Mineral, Fishing, Timber, Grazing, and Electromagnetic Spectrum Rights could be assessed. Such a tax would increase the efficiency on the use of such resources, while being progressive in nature. What about this dividend?

Would such a tax, and dividend, be a good idea for the US?

Interesting Idea, but I think there are unintended consequences in it.

If Average Americans are getting a check that adds to their income because of pollution, then how likely would it be to get widespread public support of new anti-pollution standards? How many people would now see this as "how will it effect my checkbook?"

Average Americans already ignore what is taken out of their check in taxes and only focus on their take-home pay. But the notice right away when their property tax rebate doesn't come or is reduced.

Just a thought.

Actually, overland, I was counting on such thought to make it successful. The more pollutants taxed, the more people benefit, and the more popular it becomes. I suppose there's a Laffer style curve to the taxes, as the rates increase, so does the revenue, to a point, at which point the revenue begins to decrease due to the taxes being effective in reducing pollution.

So, would smokers break even on this? They pay a bucket load of taxes on their cigs and get a refund based on how many cartons are purchased nation wide?
Just a thought....

The scary part here is, who gets to determine what a pollutant is? Or at what level a substance leaves the realm of naturally occurring and enters the realm of being a dangerous substance?

The average citizen is completely ignorant of basic chemistry and can be swayed into some bad decisions by someone using scary buzzwords.

Read this:
http://www.scottferguson.com/pages/DihydrogenMonoxide.html

I don't follow with the cigarettes. I could see assessing them additional taxes based on their particulate output, however, why would smokers get a refund (other than the universal one?).

Total revenue / # citizens = refund.

I've seen the dihydrogen monoxide bit before, fairly funny.

As far as determining what is and isn't a pollutant, we already do that through our various regulatory agencies and the due political process. I will note that the business world has pull with the EPA (and OSHA for that matter) and the EPA laws tend to be more forgiving than industry best practice. Currently, the business world has financial incentive to spend political capital to ensure they have lax environmental restrictions.

Distributing pollution tax revenue equally across all citizens, gives citizens a financial incentive to demand environmental protection.

What's the incentive to reduce pollution, though?

Public demands for reduction of pollution might waver, because they get rebates from high pollution goods & services, but not from low-pollution goods & services. So your idea lowers the bar on what the public considers unacceptably polluting, and might even encourage them to buy more "dirty" products because they want a bigger rebate cheque at the end of the tax year.

And in the corporate world, unless the taxes are massively punitive, it could be that businesses see the taxes as a marketing expense to be offset against the increased sales they might get (which, I'd bet, would be at a much high rate of correlation than traditional advertising & promotion expenses).

My guess is that at the type of levels you propose, the taxes would be counter-productive and might actually increase pollution levels, and at any level, they would likely remove many public objections to pollution by making a certian level actively attractive.

Better to direct the pollution taxes (which are a good idea in themselves) towards environmental clean-up, I think.

If you want to keep the redistributive element, though, how about closing all the corporate tax loopholes so the multinationals pay their fair whack? Or, to be even more revolutionary, tax rich people at higher rates than poor people, and give poor people a disproportionate amount of the extra revenues.

Ah, julian the incentive to reduce pollution is the most human of all traits: greed.

Take as an example, a carbon tax of $20 per ton of emission, eventually rising to a level 10x that. Fully implemented, it would raise the cost of a gallon of gasoline less than a dollar, but would have a wide and subtle pressure to reduce the emissions. The most carbon intensive industry is energy production. A carbon tax is a de facto subsidy for 'clean' energy, without requiring additional revenue sources, or giving the opportunity for any particular 'clean' energy source to politically comandeer the subsidies. A low initial rate, with clear expectation of increases, should allow industries to adapt with minimal pain.

Some sort of redistribution / rebate is necessary to keep the poor from being unduly burdened, as they spend a higher proportion of their income on heating and transportiation. I prefer rebates that don't discriminate based on income, both for ethical and practical matters.

I mentioned the Laffer curb, earlier. Even if voters show enough solidarity to keep the pollution taxes at the level that maximises revenue, such a rate would still exert more protective pressure than now, and would also require increasing the rate over time, as more and more industries clean up their act, leaving fewer and fewer emissions for taxation.

I have no problem with a portion of the funds being used to clean up sites, however, I think such clean up should be assessed to the parties responsible as much as possible: old oil sites should be fund by a tax on today's oil, if no responsible party can be identified.

Actually, I favor eliminating corporate taxes on wages and income. I'd merely tax them for the raw value of finite and unsharable resources they use. To sustain current levels of government i'd use a national sales tax (with universal rebate), so it wouldnt' matter where the multinationals were located, the amount they sold to the US market would be taxed. (Gross Reciepts x Tax-inclusive rate = Taxes owed). But that's a topic for another...topic.

I don't like the proposal at all.

Let's look at it from the perspective of your favorite coal-burning utility:

Choice A: pollutes a lot, does nothing to fix it, gets "taxed" for it, which is redistributed to some of its customers (but some folks who aren't customers will also get it), raises its rates to cover the cost of the tax and passes THAT cost along to customers. End result: the utility pollutes as much as necessary and still makes a profit, some people get money back for it, little kids still get asthma.

Choice B: pollutes a lot, so pays to fix it, gets taxed less for it, but has to pay the cost of the fixes, less money redistributed to customers and others, raises rates to cover the cost of the fixes, passing those costs along to their customers. End result: the utility pollutes less, still makes a profit, few people get their money back for it, little kids may not get asthma.

The problem with A is that the costs are little, the taxes could be removed in the next government budget process, and they still make a profit. The public service commission that helps set their rates is incentivized -- by those tax refunds that some of the voting public will receive -- to not permit new fixes to the plant. With B, the costs are initially higher, the PSC doesn't like that their voters don't get a refund, and yet the profits are the same.

Companies run on profits, not on egalitarian motives. If I'm CEO of this utility, I'm going down the A route, because costs are lower and incentives are in place to keep polluting as much as possible, since I'll make a profit either way, but my costs are lower by continuing to pollute and not fixing the problems.

amf - i may have been unclear on my proposal, the taxes on airborne emissions are collected and distributed nationally. One power plant would have negligible effect on the dividend. The actual dividend amount is equal for every citizen.

As I see it:

Option A: do nothing but pass the increased cost of doing business due to taxes on to the consumer. Loses business to cleaner energy sources, and reduced consuption by consumers due to elasticity of demand.

Option B: pay to clean up business, passes the increased cost of doing business onto consumer. Loses business to cleaner energy sources and reduced consumption by consumers due to elasticity of demand.

Either way, pollution is reduced.

The choice would have to made based on the financial expectations of the power plant. As the pollution rates went up, Option B becomes better and better, and more likely to happen. Meanwhile, with higher energy prices, it becomes more beneficial for consumers to turn off lights, turn down the thermostat, replace windows, etc.

I like the crux of this proposal but for one problem:

As I see it there is no "elasticity of demand". The energy industry is near monopoly in that there is a limited number of corporations in control of most of the energy production.
New companies, such as the one that died last year in my state, that try to offer a competitive source of "clean energy", simply cannot compete in this market.

The consumers do not have the flexibility to move with the market. We are all connected to electric lines, natural gas lines and oil delivery trucks. Our homes' values, for most, cannot sustain the cost of upgrades and modernization. Essentially we are plugged in and have little room to move from the source.

I don't think that power companies see losing your business as a likely scenario should they choose the morally low road in this proposal. I know that, almost monthly, I find a new charge on my electricity bill and, were this any other service, I certainly would be looking for another provider...

amf - that is one of the failings of a utility system, it's a government sanctioned monopoly, and basically one of those socialist things we free-market folks don't like very much. I see no reason for electric generation to be a utility, though I think the transmission of electricity should be. (Notwithstanding the California debacle)

In the absence of competitive producers, the demand is still elastic, for the mere reasons you can control, to some extent, how much electricity you consume.

Likewise, your power company should be (probably is) able to purchase cheaper power from other, cleaner utilities. It sounds like your utlity regulators aren't doing their job too well.

Taxing dirty industries allows for market forces to provide solutions, while limiting the regulatory burden of compliance. Returning at least a portion of the revenue insures that the tax is progressive, and provides widespread political support for the program.