Today’s Solutions: October 21, 2021

“We need a tax on energy and natural resources”

Eckart Wintzen | July/Aug 2006 issue
What’s wrong with the current tax structure?
Eckart Wintzen: “The government [especially in Europe] imposes a payroll tax so companies want to hire as few people as possible because labour is so heavily taxed. It becomes advantageous to use machines because the energy from petroleum and natural gas is much cheaper than human energy. That’s how unemployment is created.”
This doesn’t sound like a great situation.
“It leads to a throwaway society. If your DVD recorder is broken, you throw it away and buy a new one. That’s because repairs are expensive due to high labour costs. Apparently no one is concerned about the horrible energy-guzzling, environmentally polluting stuff they use to produce a new DVD recorder.”
So what happens when you tax energy and raw materials?
“You create a society where things that break are repaired and where there’s more service. Business people would still want to make everything as cheaply as possible, but in that case the best solution would be to use as few materials but as many people as possible. What you’d get would be companies with real added value. They might hand-paint or engrave your name in their products, for example.”
But wouldn’t this type of reverse tax mean a loss of income for the government?
“Not at all. One tax would go down and the other would go up. And it doesn’t all have to happen at once; it could be phased in. But a lot of countries would have to do it simultaneously, and that takes vision and guts.”
Eckart Wintzen is the founder and director of Ex’tent, a Netherlands-based venture-capital company that arranges financing for young companies striving for a sustainable and humane world (www.extent.nl).
 

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