As this time of year rolls around, I am always reminded how much I love taxes – You know, the opportunity to collect all sorts of forms from employers, prime contractors, financial institutions, nonprofits, medical providers – and to finally do those last few months of accounting for 2015, a task which somehow has been perpetually scheduled for “tomorrow”. And then of course there is the anticipation of paying more taxes than have already been collected – SUCH FUN!! Oh, I am sure you feel exactly the same….
OK, so perhaps I am being slightly facetious. But as we learned in that bastion of conservatism, the University of Chicago (Booth) Graduate school of Business, there are indeed good reasons for taxes. There are less good reasons too, of course – for example, the “Tea Act of 1773” designed to bail out the East India Company. It had been granted a monopoly by the British government to sell tea in “the colonies”, and the taxes on tea were supposed to protect that monopoly. The Act was heavily resented and led in part to the American Revolution. http://www.history.com/topics/american-revolution/tea-act
Nevertheless, as we drive along our (aging) highways, add social security payments into our calculations for retirement income, or visit our public libraries, we can remember that taxes DO provide much that we value. Taxes can also assist in transforming markets, and with regard to energy, such a transformation is sorely needed.
There ARE costs to the energy we use today which we do not pay – costs which will be borne by our children and grandchildren in who will have fewer “traditional” energy sources on which to rely, a world where environmental cleanup costs are high and climate change adaptation and mitigation necessary. Impressively, the world has agreed to act on climate change, and as the American Sustainable Business Council (ASBC) states, “If there is one thing we learned since the recent COP21 Summit in Paris, it’s this: Business is ready to move on climate change.” http://org2.salsalabs.com/o/6269/t/0/blastContent.jsp?email_blast_KEY=1355071
Over 10 years ago, when scientists Robert Socolow and Stephen Pacala of the Princeton University Carbon Mitigation Initiative came up with their “stabilization wedges” designed to keep carbon in the atmosphere from growing, they posited that an “all of the above” approach to renewable energy generation could keep CO2 levels on a flat path, using then-current technology. http://cmi.princeton.edu/wedges/intro.php
Since that time, the renewable energy industry has made enormous progress. In fact, “…according to GTM Research’s latest report, U.S. Residential Solar Economic Outlook 2016-2020: Grid Parity, Rate Design and Net Metering Risk, 20 U.S. states are currently at grid parity, and 42 states are expected to reach that milestone by 2020 under business-as-usual conditions.” (www.greentechmedia.com)
Businesses are on board with innovating in the renewable energy market, and are making enormous progress despite the regulatory uncertainties in the US. We don’t NEED a “carbon tax” to change the market – but it would help us move faster, be more competitive, and provide great benefit to small businesses and consumers. As the ASBC writes, “Done right” (a carbon tax) “…could even help stimulate our economy by using the money for tax cuts, infrastructure spending, or other priorities.”
I LOVE (good) taxes – don’t you??