
Ex'Tax – The big idea - namenotrequired
http://www.ex-tax.com/big-idea/
======
pradn
The problem with taxing products higher is that it essentially becomes a
regressive tax on the poor. If milk is $2 more expensive per gallon, that hits
a poorer person much more than a rich person. This is why it's a hard sell to
tax goods everyone relies on, like food, oil, and electricity. You could
possibly then give a subsidy to lower-income people, but it's hard to track
exactly how much a person spent on smaller items throughout the year.

~~~
nightski
I liked the FairTax proposal - subsidy is given to everyone regardless of
income level or spending and is enough to cover the tax on necessities. Of
course it's never going to happen.

~~~
notahacker
Every redistribution of the tax burden has winners and losers. With the
FairTax, it's not poor people who consume very little because they get a
bigger subsidy than before. It's not those people who make far more money in a
year than they can possibly spend (especially once you cut the now tax-free
real estate[1] and lavish consumption on foreign holidays out of the picture).
It's the average working person.

[1]I've yet to see a sane argument for why you'd want to give property
speculation a massive tax advantage over buying and selling consumer goods

~~~
hipsterrific
The issue of tax burden is that the only loser are the people. Government
issues taxes and can enforce it violently, so Government is the only winner in
the tax game. For the wealthy, the move to a FairTax is neutral they don't
benefit from it just as they don't have the same negative effects that a
progressive system has with its loopholes. Also, we need to stop thinking that
our economy will get better if we somehow increase the tax burden on the rich.
What we need to start thinking is how to improve the plight of the poor and
the needy.

The reason why I supported the FairTax because of the prebate and it increases
the purchasing power of the poor. When the poor can keep 100% of their pay,
they control what they can spend on. For the middle class, the same deal: we
can have families improve their lives, save up for college, be masters of
their spending, and pave the way for more charity. The rich will continue
being rich, regardless but if we can ease the tax burden on the middle class
and the poor by removing income taxes it'd be a big break.

------
stegosaurus
I think a lot of the issues that result in high resource usage emerge from the
way as a society we change the norms of what is considered 'essential'.

A lot of the time, responsible decision making just has to be thrown aside if
you want to actually function.

Take owning a car as an example (UK perspective here; may differ in the US).
With some effort, you can structure your life in such a way that one is not
necessary and therefore get by via cycling/public transport.

That may mean huge sacrifices, though. Families are often spread far and wide,
it's not rare for two cohabiting partners to be stuck in a situation in which
living close to work is a 'one or the other' choice.

Would taxing fuel more fix that? I'm not sure. I think it's just considered a
'cost of doing business' (i.e. being employed).

Similarly, 40 hour+ work weeks are normal. This results in people either
trying to maximise their use of downtime (and thus choosing the bus that takes
20 minutes over the walk that takes an hour), or simply being exhausted enough
that more 'convenience' purchases feel justified.

I think we would all be far better off simply 'doing less' (for lack of a
better term), and I think proposals like a basic income go quite far towards
achieving that.

~~~
cbd1984
> Take owning a car as an example (UK perspective here; may differ in the US).
> With some effort, you can structure your life in such a way that one is not
> necessary and therefore get by via cycling/public transport.

This is extremely tin-eared and utterly ignores the realities of farmers and
ranchers. You know, the people who grow the food which the rest of the country
relies on.

Just blandly stating that cars aren't necessary is wrong.

~~~
SapphireSun
Farmers and ranchers are <1% of the US population last I heard. They could get
an exemption for certain uses if they really needed it, hell we do that all
the time.

Not sure where I stand on this proposal yet, but policies don't have to be all
or none, though administration is far easier if they are.

~~~
Joeboy
> They could get an exemption for certain uses if they really needed it

In the UK (and maybe everywhere else?) agricultural diesel ("red diesel") is
taxed separately from consumer petrol/diesel.

~~~
dtparr
Similar things exist in the US. They sell dyed fuels tax-free (or at a lower
rate, I forget). You can apparently also claim a tax refund if you use taxed
fuel for farm purposes.

[http://www.irs.gov/publications/p225/ch14.html#en_US_2014_pu...](http://www.irs.gov/publications/p225/ch14.html#en_US_2014_publink1000218851)

------
jakozaur
Great idea, but we need to think through execution.

So far "green laws" like Germany Energiewende is not that successful:
[http://www.economist.com/blogs/economist-
explains/2014/12/ec...](http://www.economist.com/blogs/economist-
explains/2014/12/economist-explains-10)

On the other tax, high taxes on oil encourage efficiency and public transport.

~~~
sjtrny
"Not successful" according to conservative publication The Economist. A
massive uptake in solar and wind power seems successful to me. They just need
to iron out some kinks in the incentive scheme.

~~~
JetSpiegel
Indeed. Portugal had a similar system, the kinks are that the subsidies are a
bit high, there's a lot of people buying solar panels just to sell the power
back to the network. This is because the price per kilowatt uploaded is more
expensive than downloaded. This is great, you get a big installed base with
this short-term carrot, and when the subsidies are removed the panels are
still in use. Win-win.

------
api
I've heard versions of this before. It sounds almost like a no-brainer to me.
_Of course_ you should tax resources more than labor, especially non-renewable
resources and those with negative externalities.

~~~
clarkm
Does having additional children count as using more non-renewable resources,
or is it providing more labor?

~~~
api
It provides more labor. Whether or not it uses more resources, and which
resources, depends. But if you tax resources themselves, it doesn't matter.

I'd say tax non-renewable resources and externalities (e.g. CO2) most of all,
for the same reason you tax liquor and cigarettes.

------
sien
There is a lot of things they say that are not valid. The idea that we are
running out of resources in general is wrong.

The Simon-Ehrlich Wager showed how wrong this idea is:
[http://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager](http://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager)

There is an excellent book 'The Bet' about the wager. Over the course of the
20th century despite global population increasing by at least 200% and global
GDP increasing even more prices of a bundle of metals decreased overall
between 1900 and 2000.

Since 1950 the world has extracted more than the known reserves of tin,
copper, iron ore, lead and zinc and yet known reserves are bigger than in
1950!
[http://www.econlib.org/library/Enc/NaturalResources.html](http://www.econlib.org/library/Enc/NaturalResources.html)

There is an energy problem. Fossil fuels are getting more expensive and
anthropogenic global warming is a concern. However, Europe already has big
taxes on fossil fuels.

What Europe, and the rest of the developed world don't do is spend enough on
researching better forms of nuclear energy. ITER and others are something, but
it's not enough. A better approach would be to increase funding on energy
research.

~~~
TheCraiggers
>Since 1950 the world has extracted more than the known reserves of tin,
copper, iron ore, lead and zinc and yet known reserves are bigger than in
1950!

So, you propose that because we keep improving extraction methods / keep
finding new deposits of non-renewable resources, that these resources are
infinite?

~~~
adventured
The parent is very clearly not suggesting anything of the sort.

They're pointing out that the hysteria focused on resource scarcity is
unfounded, has been proven to be unfounded over and over again for the past
century, and will likely continue to be shown to be unfounded for the next
century.

------
damonpace
It's more likely that this will end up being a new tax on resources, instead
of ending labor taxes. The true purpose of the tax is to create a new tax on
resources. Ending labor taxes just seems to be a sales pitch to get support.
From a cynics point of view, it's just a new way to sell a
carbon/environmental tax. More taxes!=More Rainbows.

~~~
SapphireSun
So here's something I've been wondering about for a while. Say you tax
everyone exactly equally and like bitcoin, provide easy ways to divide
denominations of money. How is the tax actually hurting anyone? Wouldn't the
value of currency simply normalize to the post tax level?

To me, the major difference between renormalizing currency and taxing (in this
simple case) seems to be that the government can inject money into specific
industries and projects without causing inflation (as the money supply is held
level). Is this correct? If so, how does this apply to the real world? Is it
just a special case?

~~~
notahacker
If the government has some automatic way of making half the money in people's
bank accounts disappear into thin air, then yes, prices can be redenominated.
Except for all those long term debts and contracts with future prices agreed;
it's not so simple to accept a 50% pay cut when your mortgage stays the same.
And in practice, if the government does take half the value of the money in
circulation out of people's accounts, most of it will be find its way directly
or indirectly into other people's bank accounts, so prices won't go down
anywhere near 50%

The major difference between taxing and renormalizing (or printing) money is
stabilising the currency's value, but distributional effects are also
important and mostly intended

------
acd
Current consumerism is not long term sustainable where we throw away devices
every year that's built in low cost countries and are not built for recycling.
Taxing materials will make an economic incentive for both producers and
consumers to recycle

------
jim_greco
The problem with ideas like is that the amount of tax raised is small compared
to what is collected in income taxes. It's a fantasy to think we can replace
an income tax of up to 60% of income with an indirect consumption tax.

An Ex'Tax also ends up being regressive like consumption taxes. The poor spend
a lot larger percentage of their income on consumption (which are what those
resources end up going into) then the rich do.

------
michaelt
If the EU taxed metal mining, would EU car manufacturers be able to import
from abroad and to save money? Or would there be an import tariff on foreign
metal too?

Would the money be rebated if the cars were exported, so they were competitive
with cars from other countries, or would cars manufactured in the EU be more
expensive than cars manufactured in other countries?

------
xrange
Sounds reasonable. The political optics angle might be interesting, since the
"1%" is heavily labor based (Lawyers, Doctors, etc.), and the 0.01% isn't
labor based, and I wonder how much it is resource based (i.e. Bill Gates and
tech moguls aren't using natural resources, and the inheritance crowd aren't
either).

~~~
VLM
The lack of discussion of cap gains and corporate income tax is peculiar. The
devil is always in the details.

There is an assumption in the plan that labor is infinite and fungible and
interchangeable and therefore quite worthless as a limitless pool, but reality
is that "growing a doctor" takes a lot more time and resources than "growing a
coal mine". As a strategy for centrally controlling a market, it would
probably lead to more volatility in prices and supply and demand overall.

I'm not sure how the excise tax would be different from a carbon tax. That may
be the whole point, here's a new marketing spin on a bad idea, look, its got a
new name and everything...

------
markmassie
This proposal seems to make a lot sense for deciding _what_ to tax, but I am
curious about how this would affect _who_ is getting taxed and _where_ these
changes would be felt.

It seems like decreasing taxes on labor (people) and increasing taxes on raw
materials (things we dig out of the ground) would simply shift the tax burden
away from urban areas (where people are) to rural areas (where the mines are).

Wouldn't this just make things worse for poorest parts of the country, like
Appalachia, where the mining industry is typically the only provider of well
paying jobs?

~~~
VLM
Something to think about is "the masses" are not going to quietly stop
driving, stop working, stop eating, and die. They'll just pay more carbon tax.
So if keeping 400M americans alive takes 400 train loads of coal, they'll
still be mining and shipping 400 train loads of coal, just the next taxes paid
to .gov will increase, everyone will be poorer, slightly lower standard of
living, but the cops will spend money on more and better guns to shoot us
with.

Its not like the mine owners are going to eat the tax losses out of their own
pocket, LOL. The price of their product will increase.

As a side effect the more regulated an industry the more corrupt it'll be on
average. So expect plenty of sweet tax loopholes to make up for it, so to be
revenue neutral at the new higher tax rate the proles will have to pay even
higher taxes.

Higher taxes always result in higher tax evasion, I'm guessing black market
coal would be non-trivial to work, but black market charcoal or black market
firewood would become a pretty serious issue under this carbon tax 2.0.

------
applecore
No mention of Georgism[1] and the economic efficiency of a land value tax?

[https://en.wikipedia.org/wiki/Georgism](https://en.wikipedia.org/wiki/Georgism)

------
joosters
Why can't these kind of advocacy websites bring themselves to talk about the
downsides of their proposed plans?

Nothing is perfect, and pretending that your proposal is simply flawless makes
you look like a fool. Having the honesty to talk about weaknesses and
drawbacks is what any sensible research should do (and not just so that they
can hand-wave them away).

If you can't deign to admit you and your ideas are not perfect, your campaign
website makes you look narrow-minded and foolish.

~~~
notahacker
In fairness, they do have a more detailed report which considers some of the
downsides (they acknowledge putting VAT up puts some jobs at risk) as well as
makes it clear their proposals are quite moderate (there's an income tax cut,
but still a substantial income tax) and that they haven't done any
macroeconomic modelling. It's also relatively easy to pick loopholes in, but
at least it actually gives some of the specifics the pretty graphics and "tax
some metals" of the rest of the website sorely lacks.

[http://ex-tax.com/files/4314/1693/7138/The_Extax_Project_New...](http://ex-
tax.com/files/4314/1693/7138/The_Extax_Project_New_Era_New_Plan_report.pdf)

~~~
joosters
Thanks for the link - I had only discovered the white paper. IMO they should
still have these things in there...

------
cubano
I find proposals like this often miss the political side of the equation ie
wealthy donors and multinational corps simply allow the law to be passed,
knowing, in fact, by spending down the line, they can get loopholes put into
the law that will circumvent the system.

Now, this, by in itself, is no reason not to support the idea (which I do, for
the most part, esp. the lower taxes on wages), but I feel it should be
addressed up front.

------
mod
Cached version:

[http://webcache.googleusercontent.com/search?q=cache:Uy_qQDp...](http://webcache.googleusercontent.com/search?q=cache:Uy_qQDpv2bkJ:www.ex-
tax.com/big-idea/&hl=en&gl=us&strip=1)

------
Xeoncross
Finding alternative ways to tax seems like a straw man. Not that it's not a
good idea, but why not find ways to cut many of the unneeded taxes first?

~~~
minot
This is why I hate the whole "starve the beast" idea. Even Cato Institute
(which I disagree with on so many issues) agrees that starve the beast was a
resounding failure. If we want to cut federal spending, we need to cut federal
spending. We can't cut income and hope that this cuts spending.
[http://object.cato.org/sites/cato.org/files/serials/files/po...](http://object.cato.org/sites/cato.org/files/serials/files/policy-
report/2004/3/cpr-26n2-2.pdf)

Of course, in reality, nobody is a real conservative. Everybody only wants to
cut spending on things they disagree with but I doubt there's anyone who will
advocate spending cuts across the board, even if they benefit from such
spending (and therefore the spending cut would hurt them).

~~~
epitrochoidal
Just curious, how do you identify a "real conservative"? Fiscal policy, social
policy, what's the differentiator?

~~~
minot
Sorry, me using the word "real" was unwarranted and vague. I meant in terms of
fiscal policy. I should have been clearer.

