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Paying what we owe,3604,1356484,00.html

People should be taxed on what they use of the earth\'s resources, not what 
they earn

James Jones
Monday November 22, 2004
The Guardian

   The modern world has lost much of its connection with the earth. It is 
as serious as shoppers losing sight of their bank balance. For consumers of 
the earth\'s resources there is no check on our profligacy; we are so 
removed from the consequences of our actions that we live comfortably in 
denial, ignoring the prophets of doom who predict an impending 
environmental crisis of epic proportions.

  Planet Earth possesses an extraordinary capacity, but it is not 
limitless. How then shall we live and, in particular, how should those in 
business and industry deal and trade in the earth\'s resources? Taxation 
provides for a degree of redistribution of wealth, although national and 
global evidence suggests that the gap between rich and poor is growing larger.

  The most substantial tax revenue comes from taxing income, especially 
labour. The time has come for all political parties to rethink 
fundamentally this balance. We should gradually shift from taxing labour to 
levying taxes on the use of original resources.

  There are two reasons. First, this would exercise more of a discipline on 
our use of original material, which would encourage us to conserve and 
replenish the source. Second, it would stimulate labour and encourage us to 
be creative and innovative in our use of original material. Current 
industry and business seem to be based upon using minimum labour in 
relation to resources used; we urgently need to invert the ratio into the 
minimum amount of resources used in relation to labour.

Taxation has always been a form of value-driven social engineering. Tax 
differentials and tax breaks affect behaviour. Changing the balance of 
taxation away from labour to resource would suit all three major political 
parties. Conservatives would welcome the rewarding of enterprise, Liberal 
Democrats would value the lessening impact on the environment, and Labour 
would see it as a means of sharing goods more fairly.

  Changes in the tax regime would need to be introduced gradually, but 
shifting it from one area to another would keep the overall tax take the 
same and make the change tax neutral to the economy. Interventions would be 
needed toensure that the poor and unemployed had access to the basic 
requirements for human flourishing.

  The Joseph Rowntree Foundation has just published research on reducing 
the impact of green taxes and charges on low-income households. There are 
real concerns that green taxes could hit the poor disproportionately, but 
they believe it is possible to devise strategies that would relieve 
hardship. For example, all water could be metered and the first x litres 
per household member would be free. Thereafter water would be taxed so that 
those using it for car washing, large gardens, swimming pools, etc would 
pay for their water according to use. This would drive down consumption 
while at the same time protecting the needs of low-income households.

  Shifting the burden of tax from labour to resource in today\'s world would 
mean that the most successful businesses would be those which deployed 
labour as creatively and innovatively as possible so as to use the minimum 
amount of original material in their products.

  Much thinking has already been done about our use of carbon and how we 
might reduce the amount of emissions. \"Contraction and convergence\" has 
been proposed to ensure a fairer use of carbon across the developed and 
developing worlds. The aim is to redistribute all nations\' carbon credits 
so as to exert a more disciplined, moral and responsible use of carbon.

  Excessive carbon emissions by richer countries change the climate, 
warming the globe, melting ice, raising sea-levels and flooding some of the 
poorest countries in the world. Allowing countries to trade in carbon 
credits is a form of taxation that disciplines and drives down the use of 
original resource and allows for its absorption within the capacity of the 

  It is for economists and politicians, together with the business 
community, to decide on how exactly we share the earth\'s resources with the 
sense of responsibility that the \"rich\" should have for the \"poor\", and the 
present should have for future generations. As a pastor who sees the 
consequences of poverty both in this country and in others, I urge those in 
business to embrace an ethic of the earth and a greater sense of social 
responsibility. Ultimately, decisions taken will depend on moral values; we 
should not spend the earth and squander the resources that belong also to 
future generations.

   The Rt Rev James Jones is the bishop of Liverpool
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