To fix the climate, grow jobs or make living in society easier and more pleasant, governments cannot simply issue orders: use less fuel! Set up more businesses! Stay in better shape! So to nudge things in the right direction, they use the little levers in our wallets: taxes and tax breaks. Although usually a few pence here or a couple of cents there, these tweaks can add up to huge social change. Here are ten of the cleverest and most imaginative:
1) Throwaway culture
To discourage shoppers from buying cheap things then throwing them away when they break, Sweden is giving tax breaks for repairs on clothes, bikes, fridges, washing machines and other appliances. The idea is to make it easier for people to buy quality, and get it mended, creating less waste and lowering climate-changing emissions in other countries where Sweden doesn’t have direct control.
2) Steaks for sustainability
The Danish Council of Ethics has proposed a ‘climate tax’ on red meat. Since cows account for a tenth of the world’s greenhouse gas emissions – and food production as a whole accounts for a quarter – the government thinktank wants to nudge people into eating less meat. Ultimately the Council wants all foods to be taxed according to their effect on the climate.
3) More poets and dreamers
In Ireland, writers, composers and visual artists pay no income tax on their earnings. Started in 1969 as a way of attracting bohemians, the scheme is still running strong, with some 2,500 people claiming it. The only ongoing controversy is that the work must show ‘artistic or literary merit’, something often said to be lacking from the celebrity memoirs that also benefit.
4) Miles on the clock
Instead of an annual vehicle tax, or levies on fuel, five US states are working on taxing drivers according to how many miles they cover. For Connecticut, Vermont, New Hampshire, Delaware and Pennsylvania, the point is to make sure the owners of hyper-efficient or electric cars still pay a fair share for using the roads, but a potential side-effect is to get people out of their cars and onto public transport.
Israel has pegged CEO’s salaries to those of their lowest-paid workers. If they’re paid more than 44 times that of the lowest, they incur punitive taxes intended to prevent the ‘ethical and moral failure‘ of big pay differences. In the US, where the gap is widest, the average CEO gets 300 times the pay of the lowest worker, up from 25 times in the 1970s.
6) More jobs
India is so keen to encourage the innovative start-ups that it believes will provide the jobs of the future that it’s giving a big boost to their growth in the difficult early stages. For the first three years they’re in profit, they pay no tax at all, so as to help their owners reinvest in the business and keep it expanding.
7) Affordable housing
As the shortage of places to live makes urban life increasingly unaffordable, cities like Vancouver and Paris are trying to make people use the tens of thousands of homes sitting empty. Paris has just quintupled rates on its 92,000 unused properties, hoping that owners will sell or rent them out. And even tax-averse Saudi Arabia has just announced a levy on undeveloped urban land.
8) Cutting obesity
Britain and South Africa have become the two latest countries to jump on the global bandwagon and introduce a tax on sugar. Denmark has had one for decades, and Mexico and France have recently instituted them. Whether it will actually stop people getting fat is unclear, but something similar has worked for smoking. Steady cost increases, together with public campaigns, have reduced it to its lowest-ever levels in many countries, and Australia is even talking about virtual eradication.
9) Organ donors
Several US states give tax breaks of up to $10,000 to anyone who donates an organ or bone marrow. At the moment, there are 120,000 people in the US waiting for an organ to be donated, and 22 die every day. Federal and many state employees who donate also get 30 days’ paid leave.
10) Post-Soviet solidarity
When the Berlin Wall came down and the two Germanies were reunited, it rapidly became clear that a huge transfer of money from West to East was going to be needed. The cost of bringing the ex-Soviet East up to speed has been estimated in the billions of Euros. So ever since 1991, most Germans in regular work have been paying a ‘solidarity supplement‘ to build roads and support business in the areas previously under Communist control.
- Do you agree that tax needn’t be taxing? Do you have some favourite levies? Let us know what we should be checking out: firstname.lastname@example.org
(Picture credit: Pexels/mali maeder)