Trends in Taxation
Woehlke, James A., The CPA Journal
New ideas and concepts:
Will the next tax revolution be cyber-green?
Reinventing Federal Taxation
Despite the public's and practitioners' constant griping over the complexity and unfairness of the tax code, real change never seems to materialize. There are some in Congress that seek to pass a Date Certain Tax Code Replacement Act. By setting a date when the existing IRC would terminate, such a bill is intended to force a debate on alternative tax systems.
What alternative system will the politicians propose? The usual candidates are a national sales tax, value-added taxes, the USA tax, and the flat tax, all of which have been discussed in The CPA Journal in recent years. But there are other forms of taxation that may become politically popular in the future, including "green" tax policy concepts and transaction taxes.
A new arrival on the national tax policy scene is the Global Institute for Taxation (GIFT), the brainchild of St. John's University tax Professor Patrick R. Colabella. At GIFT's first conference, "Taxation Alternatives for the 21st Century," an impressive number of highly creative proposals were presented, several of which tap into societal trends that may well gain momentum over the next century. The proponents believe that, by so doing, they can overcome many of the shortcomings of the existing system and the alternative systems discussed every four years, such as a flat tax, national sales tax, or valueadded taxes. If their logic is sound and the mood of society is right, their tax policies may become politically popular and even see the light of day in legislation.
However much observers quibble about the quality of the science and the accuracy of the statistics underlying many environmentalists' dire predictions, the fact remains that the environmentalist outlook has taken root in the United States. Stroll through a typical elementary school and observe the projects on display or visit the local zoo and study the information presented on rainforest conservation. The environmentalist message has entered the mainstream.
The environmentalist movement, which has traditionally focused its agenda on preservation and conservation through direct legislation, is now generating tax policy proposals.
At the GIFT conference, Alanna Hartzok, United Nations NGO representative to the International Union for Land Value Taxation and Free Trade, presented "Financing Local-to-Global Public Goods: An Integrated Green Tax Shift Perspective," a paper on green taxation. Her proposal is replete with political slogans such as "tax waste, not work," "tax bads, not goods," and "pay for what you take, not what you make. " The slogans illustrate Hartzok's preference for environmental and land-based taxes over taxes on income, capital, and consumption of necessities. If realized, this preference would result in a "green shift"-a tax policy shift from current approaches that tax "private wealth" to a policy that taxes consumption of "common wealth," such as air quality and mineral resources.
Under Hartzok's proposal, tax cuts on income and capital gains taxes would be offset by new or additional taxes (or user fees) on some or all of the following:
* Emissions into air, water, or soil
* Surface land sites, according to land value
* Public lands used for timber, grazing, and mining
* The electromagnetic spectrum
* Geo-orbital zones
* Depletable natural resources such as oil, natural gas, and minerals
* Ocean fisheries
* Water resources.
In addition, this proposal would reduce or eliminate current subsidies deemed "no longer necessary, environmentally or socially harmful, or inequitable or unfair," including subsidies for the following:
* Energy production
* Resource extraction
* Waste disposal
* Agriculture and forestry
* Private transport and the infrastructure it requires
* Investments designed to exclude labor from production. …