Sunday, September 17, 2006

Green taxes are in - at what cost?

All the UK political parties are scrambling to garner the green vote. The Tories (Conservatives) have changed their logo to a green tree scribble while the Lib Dems are touting yet more green taxes. You might be right in thinking that eco-friendly voters may be up for grabs!

But what do green taxes really mean. Does this policy actually make sense? That's a difficult question but it is not necessarily difficult if you simply state that less taxation is better than more taxation! As several nations are proving these days (from the US to Australia to some Eastern European countries) a policy of reducing taxation actually generates more tax revenue through stimulation of the economy.

In Europe, ever higher gasoline taxes are designed to kerb drivers' appetites for using their vehicles. Does it work? No! Simply more of the personal budget goes toward the idea of personal mobility. And now the Government sees higher gasline taxes as a necessary fund raiser for almost anything other than providing a better road system!

Does the Government own tax revenue? Most people think so. But in reality, tax payers should think of their taxes being invested in the government for the government to provide those services the tax payer cannot provide as an individual. Basically, we should be able to trust our governments with our taxes and this does not necessarily mean that those taxes are given to the government to spend for its own self-aggrandisement. This concept is better understood in America than in Europe. But the understanding is far from perfect!

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