March 22nd, 2007

(no subject)

Al Gore is getting a lot of media time right now because he went to congress saying we have to act about global warming. He proposed taxing corporations based on greenhouse emissions. The official reason for pushback is because it would give American companies a competitive disadvantage. I think Gore is making a mistake.

He proposed a tax based on the location of incorporation (or possibly of production). This would create a disadvantage for American companies and require lots of politics to get similar taxes instated internationally. A more effective tax would be based on location of consumption. If someone in China buys an American product, there should be no US pollution taxes on it. But, if I buy a product that requires significant pollution to produce, my government should tax that purchase (preferably before I'm shown the price). That would not create a competitive disadvantage, it would encourage other countries to create similar taxes, and it would be revenue positive for the US. In addition, it would be easier to pass.