Friday Morning Links

Assorted content to end your week.

- Frances Woolley rightly challenges the conventional wisdom that there's no such thing as a popular and efficient tax:

Few taxes generate enthusiastic popular support, but some are more popular than others. Those are the ones that fill the red circle.

The area labelled "both" in the diagram above includes two types of taxes. The first is the tax that produces concrete, tangible benefits, but does not distort people's behaviour in undesirable ways. For example, carbon taxes are popular - polls (or, at least some polls) suggest that the majority of Canadians support them - because they produce benefits, in the form of a cleaner environment. To the extent that they distort people's behaviour, they do so in desirable ways.  Taxes introduced during wartime have also had widespread support (their efficiency may be more debatable). Their popularity was achieved, as this Disney propaganda film shows, by framing them as part of a patriotic war effort: "taxes will keep democracy on the march."

A second type of efficient and popular tax is one that the majority of people do not have to pay, and the minority cannot avoid. The incidence of cigarette taxes falls on the minority of Canadians who smoke, grow tobacco, or own shares in tobacco manufacturing companies. The tax is popular with the majority (for US poll numbers, see here, here, or here) because they do not have to pay it. Unless cigarette taxes are very high, they are also relatively efficient: because nicotine is so addictive, smokers often would rather pay the tax than change their behaviour. (To the extent that cigarette taxes induce behavioural change, this may be a good thing).

Taxes on resource rents are also, I would argue, a tax paid by a minority within the population - the owners of the corporations that extract those resources (Andrew Leach has a primer on Alberta oil tax royalties here). Why? As a general rule, the economic burden of a tax falls on whoever cannot change their behaviour to avoid it. A tax on call centres can be shifted to call centre employees, because call centres operations can make employees a take-it-or-leave-it-offer: "accept these wages or we'll move to a lower-tax jurisdiction." Resource extraction companies, however, have to stay where the resources are if they wish to keep on extracting them. They have few alternatives to just paying up.

But it's particularly worth noting that Con-style anti-tax ideology represents the greatest obstacle to any attempt to move toward the "both" area: to the extent the public accepts the claim that any increase in any tax must be avoided at all costs, it becomes impossible to discuss how best to rearrange our current structure to both improve efficiency and achieve concurrent goals.

- Meanwhile, Larry Rousseau comments on the cost of deregulation.

- Henry Blodget discusses why corporate control over our economy has reached the point where even people predisposed to dislike unions can't help but to see the desperate need for better labour organization. And Duncan Cameron points to public opinion as the other essential counterweight to elite control that's been far too ineffective in our recent past.

- Finally, in keeping with the theme of yesterday's column, Adam Ramsay writes about the need to redefine "progress":

If we aren't going to be motivated by a desire, which is destroying the planet, for ever more trinkets, what else can drive us?

There are of course, lots of answers to that. I hope we can all spend more time caring better for each other. I'd like all of us to be allowed to spend more time making art. But there's something else too. I am certain that our innate desire to explore and to understand is as strong as out (sic) innate desire to accumulate and consume.
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Environmentalists must re-imagine what civilisation is for, what humanity is for. Yes, that should include being inspired once more by magnificent forests and quirky plants and incredible animals. These things are wonderful.

But I think it also has to include a vast expansion in the amount of time and money we invest in advancing and disseminating all human knowledge. We ought also to care about exploring the makeup of the cosmos, and of atoms and of chemicals. Because we are humans, and asking questions is what we do best.