Would You Pay Higher Taxes for a Cleaner Environment?

April 20, 2007

Everyone wants a cleaner environment but who’s willing to pay for it?

A Global Warming Tax?
I heard a blurb on NPR this morning that Americans think the biggest environmental problem we face is global warming. However, when asked if they’d be willing to pay higher taxes to improve the problem the majority of people said no.

The carbon dioxide produced from automobile and power plant emissions is a major contributor to the greenhouse effect. The radio report mentioned potentially taxing electricity and gasoline to help offset the effect of greenhouse gas created from coal burning power plants and gasoline burning automobiles.

What’s a Money Smart Solution?
We work so hard to earn and save money; anytime someone brings up a new tax my first reaction is, no way! I think I understand the reasoning behind the taxes:

  • Use tax revenues to offset the negative impacts of greenhouse gases or find alternative energy options
  • Raising the price of consumption would change habits & lower usage

These ideas are great in theory but would they really work? Would the government fund more anti-pollution measures and energy innovation? Would we use less gasoline or electricity? Or would the energy and pollution problem just remain the way it is with us consumers just paying more taxes?

The money grubber inside of me says keep your hands off my wallet but the nature lover says we have to try something. Would you be willing to pay “environment” taxes? If not, what’s a better solution?


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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10 Responses to Would You Pay Higher Taxes for a Cleaner Environment?

  • Ben

    KMC, I know what you mean about trash bags vs. recycling bags. I’m a big recycler, its amazing how much less trash you have once you recycle your plastics, paper, glass, cardboard, aluminum, and paperboard.

  • Ben

    I agree with a lot of what you guys are saying. The government does seem to have a knack for wasting tax payer’s money.

    Jeremy, I agree it is a global problem. I don’t know a lot about the Kyoto Protocol, the international effort to reduce greenhouse gases, but I do know that our government refused to participate. I think the reason the US wouldn’t commit was because of the negative economic impact it was projected to have on the US so we choose money over the environment.

    It does seem like incentives are the way go but I don’t think our government has them figured out yet. If a business buys a large gas guzzling SUV or truck it can get a much larger tax break than if it buys a fuel efficient hybrid.

    I think incentives that encourage businesses and consumers to change their behavior will go much farther than any tax will, of course the key is figuring out what those incentives should be and how to administer them.

  • broknowrchlatr

    Would I support it, in theory? YES
    Would I trust the government to spend it wisely? CERTAINLY NOT

  • Gilad

    instead of giving money to the government, the government should give money to the people in the form of tax credits. We already have this in place, but we should increase it. Maybe even suggesting an option of contributing money to environmental projects and getting a double tax credit on the sum invested.

    Another option is taxing the car makers,oil companies and other big polluters. In the end the consumers will pay it, but the main polluters will try and cut on the pollution in order to maximize their profits.

  • KMull

    I love when people write out my ideas better than I could do it. Well done Jeremy.

    I would never give the gov’t more money to clean up our environment. The gov’t always chooses the most expensive way to do anything. Blah!

  • KMC

    Zen’s correct in that we have the Clean Air Acts but they’re not being enforced (actually, the dates for compliance are being constantly pushed out). I certainly would pay higher taxes for a cleaner environment. Right now, people are not being charged the entire cost of doing what they’re doing (e.g. driving). Part of the cost is pollution, but it’s not completely included in the price of gas.

    In a related way, I always wonder if things would be different if we were charged by the bag for trash collection. I see lots of bags out on trash day, but not nearly as many on recycling day. (And before anyone points it out, I’m aware of the monetary costs of recycling)

  • zen

    A tax for what, now?

    So, we’re going to give the government more money so the EPA will start doing its job?

    I mean, I thought we *have* a program in place to work towards these goals that we are all ready funding. Or is the EPA just for over estimating MPG and throwing a seal of approval on carbon-monoxide belching machines?

  • Jeremy

    I’m not a big fan of giving the government any more of my money. The main reason being they can’t handle money properly as it is so if I gave them more to help clean up our environment I would expect that it would be a wasted effort. I’m all for improving our air and water but letting the government delegate how to handle it is far from the ideal solution.

    Ultimately I think it has to come down to holding the companies more accountable for the waste and emissions they produce. Yes, I realize that there are some incentives in place for businesses to reduce emissions or produce “green” products but it is nowhere near enough.

    I don’t want to go as far as saying the companies should be taxed outright if they can’t meet pollution standards, but there has to be more of an incentive to actually put these methods into use. A tax cut here or a slap on the wrist there doesn’t cut it. The penalties or incentives have to be great enough that these businesses have to seriously consider changing.

    On the other hand, I understand that if you levy taxes and penalties on a company that this cost would ultimately get passed down to the consumer which in effect would be similar to taxing us directly.

    That is why I lean more towards a better incentive program. Unfortunately since the government isn’t sitting on a surplus of money that incentives will ultimately hurt them as well, which in turn could lead to increased taxes anyway.

    As you can see I don’t think there is a clear solution, but at the very least I don’t think individual taxpayers should bear the brunt of this funding at least up front.

    If changes really want to me made I think it has to be done on a global level. While our country does produce a large portion of the world’s waste and pollution there are still many other industrialized countries that are even more lax in this regard than we are. The changes we made would wind up having a very diminished impact if the rest of the world was not following suit.

    It is definitely a complicated issue with billions of dollars and a ton of politics at stake. Hard telling how things will shape up going forward, but I think everyone can agree that something needs to be done.


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