Retrotax
by Paul Niquette
Adapted  from 101 Words I Don't Use 
Copyright 1996 Resource Books All rights reserved.

 
retrotax n. A contribution for the support of remedial governmental programs, required of persons, groups, or businesses in proportion to past uncompensated benefits. 
-- Paul Niquette


sad fact of modern life: We don't pay the full price for the products we buy.  If we did, there would be no such thing as toxic waste.  For the right price, any form of industrial or consumer waste can be reduced to benign or bio-degradable substances.

The cheapest disposal methods inevitably damage air and water resources.  Manufacturers of the products we buy cannot, of their own accord, budget enough to cover all the costs for cleansing or reclaiming factory waste.  Any enterprise that does so -- and raises prices accordingly -- will surely lose market-share, revenue, profits, and investors.  Polluters are winners.

The environmental legislation of the 1970's may be the only practical way to put competing manufacturers on an equal footing with respect to the economics of waste treatment.  The requisite bureaucratic interference has incurred noisy resentment.  The administrative costs are not small, but remedial programs are worse.  "Superfund" is well named.

The better way to protect the environment would be to use the price mechanism.  Let the purchaser of a product pay the full price, including waste treatment, for restoration of throw-away effuvia all the way back to environmentally clean materials.  As a result, some alternative technologies may have to be developed -- or rediscovered.  When the full price for styrofoam is finally paid, we may find paper cups more economic.  Or we'll go back to re-usable ceramic vessels.

Environmental protection costs should be paid by consumers.  Are they not the direct beneficiaries of that which is consumed?  Better to increase prices for plastics and solvents, for synthetic fabrics and building materials, for fertilizers and insecticides -- better to increase prices than to finance clean-up programs.  Preservation is cheaper than restoration.

Moreover, such a public policy aligns costs and benefits in the same time periods.

Depending on the environmental damage, as we have seen, a clean-up program can be horrendously expensive.  Past is prologue -- prologue and poisonous.  The main issue in publicly financed clean-up programs is the fact that future generations, who will not directly receive the benefits of the products producing the wastes, get saddled nevertheless with the costs for the treatment of those wastes.  That observation gave rise to the original "retrotax" idea for financing the Environmental Trust Fund.

It's not practical, of course.  Don't be surprised if you have never heard of retrotaxation.  Still, for the theory of it, read on.

oremost, U.S. authorities must create an independent agency -- another one of those, my fellow citizens -- that produces certifiable estimates for the magnitude of each environmental problem and the clean-up costs.

Assigning accountability for past waste disposal practices -- whether to factories or to communities or to individuals -- would be exceptionally difficult.  Yet, in order to date the environmental damage the new agency must develop findings as to the historical causes.  For polluted rivers and canals that's hard enough; for the atmosphere, forget it.

Finally comes a legislative nightmare: assessment of an environmental surtax requiring a pro-rata computation.  Based on the plausible assumption that past benefits were concurrent with expenditures, the policy requires individuals, groups, and businesses to pay retrotax in proportion to their previously reported spending rates during the periods of attributed environmental damage.

New entries to the tax rolls escape this liability, which seems fair enough.  Older, established taxpayers and recent retirees get socked, particularly if they made and spent a lot of money during the toxic waste years.

Like all crackpot ideas, mine included, this one is fatally flawed.  The intention, naturally, is to have the Environmental Trust Fund pay for the clean-up programs and then go out of business.  Retrotax would best be sun-setted.  No way.

Lawmakers are bound to see retrotax as a bountiful source of revenue for any number of other governmental programs.


 
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