Institute Study: Tax Reform for the Environment

Institute Study: Tax Reform for the Environment

Details “Green” Benefits of Simplifying Taxes, Disadvantages of Anti-Growth Policies
November 13, 2000

Washington, DC, November 14, 2000 — A new study by Competitive Enterprise Institute fellow George Pieler looks at two of today’s most contentious issues – tax reform and the environment – and explains how advocates of both can work together for mutual benefit.  While many environmental activists of the past 30 years have campaigned in favor of elaborate tax rules that would punish certain economic activities while subsidizing others in the name of safeguarding environmental quality, it turns out that the greenest tax system is also the simplest. 

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“Real tax reform, defined in terms of flattening rates and eliminating special tax favors, is a much sounder environmental policy than the highly-touted ‘reforms’ environmental activists promote,” writes Pieler in Tax Reform is Green, “Green” Taxes Aren’t.  “Real tax reform, whether it takes the form of a flat-rate income tax, a simplified sales tax, or a cash-flow tax that rewards investment over consumption, would have a profound ecological impact.”


Advantages of a simplified taxation system would include:


·        Elimination of economic friction and waste caused by government interference in market decisions, resulting in greater efficiency and less pollution;


·        Acceleration of the turnover of capital stock be reducing the tax burden on new investment and savings, thereby bringing new energy-saving and less-polluting technologies to market much faster;


·        Boosting of economic growth overall, helping businesses and individuals generate new wealth, which is the key to dealing effectively with environmental problems either in the public or private sector.


Click here for a copy of Tax Reform is Green, “Green” Taxes Aren’t by George Pieler.



CEI is a non-profit, non-partisan research and advocacy institute dedicated to the principles of free markets and limited government. To obtain a copy of the study, contact associate director of media relations at 202-331-1010, ext. 266 or