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Redistributed tax instead of TEQs

 
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Yves75



Joined: 13 Jul 2008
Posts: 256
Location: Paris, France

PostPosted: Sat Jan 29, 2011 3:57 pm    Post subject: Redistributed tax instead of TEQs Reply with quote

Why isn't a directly redistributed tax on fossile fuels considered instead of the TEQs ?

- it is much simpler (and cheaper) to implement and operate
- it does not require tracking every citizens consumption and moves (major point here, orwell isn't far already)
- it can lead to exactly the same thing economically by not favouring the rich over the poors (poor ending up positive)
- it doesn't create all these trading jobs, markets, system tweaking, and associated casino playing
- much less subject to fraud
- it is much closer to the product getting scarcer and more expensive

Redistributed part doesn't need to be 100%


Below trying to compare both schema, TEQ and redistributed taxes, in a very simplistic way :

let's suppose 1000 citizens, 100 rich 900 poors
current consumption :
rich citizen 30 eu (energy unit) per month
poor citizen 10 eu per month

so for the country 12000 eu per month

let's suppose the "international market price" of the eu is ep (energy price) and that the energy is sold at market price at the beginning

if the quota system starts at current consumption :
12000 eu delivered evenly so 12 teq per citizen/month
(the poor can sell 2 teq each month, the rich needs to buy 18 if he wants same consumption as before)

teq price determined by the market, when and where do you buy them ? a huge bureaucracy and sytem development to manage the thing, potential cheating stealing, hacking (EU cap and trade just has been stoped for carbon credit stolen by hacking)

redistributed tax system
same starting point
let's say the tax, wich has to be volume based (and not price percentage) is set up at 0.5 ep per eu at the starting point
energy bill for the poor : before 10ep , now 15ep
energy bill for the rich : before 30ep , now 45ep

tax revenu : 6000ep redistributed evenly per citizen so 6ep redistributed per citizen
actual energy bill for the poor : 9ep
actual energy bill for the rich : 39ep

Clearly considering the redistributed tax system (doesn't need to be 100%) much higher simplicity, and same effect with repect rich/poor, I think it should be highly prefered, maintaining a very clear price signal for the products. You could say it doesn't integrate the "cap" part, but how will this "cap" part be evaluated ? with "economists evaluation" ? Come on ..and the TEQ price crashing on recession (as happened with EU carbon credits) On the other hand the level of the gas pedal can be pushed regarding the tax level, residstibutive effect the same whatever the state of the economy.

Of course all this should most probably be simulated on a more real life case, but don't understand why Hansen's proposal doesn't get more traction

Do we really want to create more "financial trading jobs" in this transition ? where actual work is going to get more and more important as we go down the slope ? Isn't it time to favor simplicity over complexity ? And perhaps more importantly, having the less information possible required per citizen to run a system as a top choice criteria ?
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RenewableCandy



Joined: 12 Sep 2007
Posts: 12441
Location: York

PostPosted: Sat Jan 29, 2011 6:04 pm    Post subject: Reply with quote

That sounds like a good idea...but the "tax" would have to be called something else (and HMG to do a REALLY EMPHATIC JOB of explaining the "redistributive" bit), or there'd be Sun readers in obese cars blocking all the roads and beeping their horns.

<tries to think of a 4-letter, 1-syllable word for "redistributive"...>
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Yves75



Joined: 13 Jul 2008
Posts: 256
Location: Paris, France

PostPosted: Sat Jan 29, 2011 6:24 pm    Post subject: Reply with quote

Yes agree a new word should probably be used, a "redib" ?
(although taxes always are about redistribution somehow, except for the army maybe ...)
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An Inspector Calls
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Joined: 27 Jan 2011
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PostPosted: Mon Jan 31, 2011 10:05 am    Post subject: Reply with quote

RenewableCandy wrote:
...but the "tax" would have to be called something else


A bit like the tax on electricity that goes to ROCs?

That's worked - so far. So well, that it's now over 15 % on our electricity bills (c.f. Hansard)!
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woodpecker



Joined: 06 Jan 2009
Posts: 851
Location: London

PostPosted: Mon Jan 31, 2011 11:41 am    Post subject: Reply with quote

I'd be surprised if a tax had any impact at all on consumption by the rich. They just pay the tax. They don't notice and don't care.

If you have two-three-four-five million+ pound homes and pay several thousand a year for energy at each.... and another few tens of thousands of pounds travelling between them... If you have a collection of rare Ferraris (which apparently Chris Evans does) ... A thousand pounds or ten thousand pounds here or there is peanuts and won't change your behaviour.

With any tax you will just pay the tax when you pay the bill (or your staff do). With TEQs at least they have to get their staff to buy TEQs at whatever the price from people who want to sell (like you and me) in order to be able to use the additional energy.
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emordnilap



Joined: 05 Sep 2007
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PostPosted: Mon Jan 31, 2011 11:48 am    Post subject: Reply with quote

woodpecker wrote:
I'd be surprised if a tax had any impact at all on consumption by the rich.


...mainly because they can pay someone to find a way of not paying it...then claim the costs of doing so against tax.
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Yves75



Joined: 13 Jul 2008
Posts: 256
Location: Paris, France

PostPosted: Mon Jan 31, 2011 1:44 pm    Post subject: Reply with quote

woodpecker wrote:


With any tax you will just pay the tax when you pay the bill (or your staff do). With TEQs at least they have to get their staff to buy TEQs at whatever the price from people who want to sell (like you and me) in order to be able to use the additional energy.


We don't need another fake market and brokers, what you talk about has to be handled through the income tax.
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woodpecker



Joined: 06 Jan 2009
Posts: 851
Location: London

PostPosted: Mon Jan 31, 2011 8:34 pm    Post subject: Reply with quote

So by exactly how much have you reduced your energy consumption as a direct consequence of taxes on fuel that you buy?

And if you were a multi-millionaire, would the answer have been any different?

Don't forget, the end result *has to be* a major reduction in fuel use.
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