Tax shifting

Written by Bernie Fischlowitz-Roberts

Many countries have implemented taxes o­n environmentally destructive products and activities while simultaneously reducing taxes o­n social security contributions or income. The scale of tax shifting has been relatively small thus far, accounting for o­nly 3% of tax revenues worldwide. It is increasingly clear, however, that countries are recognizing the power of tax systems not o­nly for raising revenue, but also for shaping economic decisions of individuals and businesses.

The goal of tax restructuring is to get the market to tell the ecological truth. Thus far, tax shifts have been modest in scope and have produced positive, if modest, results. Creation of an eco-economy calls for tax shifts of much larger magnitude in order for prices to reflect their full costs and to produce the requisite changes in individual and collective behavior.

Bernie Fischlowitz-Roberts, The Earth Policy Reader, p. 245.

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