Submitted by Annette Nellen on April 1, 2008 - 7:01am.
Yes - existing tax rules and proposals should consider the principle of economic growth and efficiency. The tax law should not work counter to goals of a particular jurisdiction. For example, there are many ways to measure income including what depreciation schedules should be used. A jurisdiction, such as the US, should not use a 20-year life for semiconductor equipment as that would be harmful to chip manufacturers (even though it would measure taxable income). If a jurisdiction, such as California, has a CO2 emission reduction target, it should consider how its tax law can help meet that goal. If a jurisdiction is giving tax incentives to burning oil, that would be counterproductive. A carbon tax with revenues used to reduce some other tax that is not efficient and/or to help reduce CO2 emissions would make sense.
non-revenue goals
Yes - existing tax rules and proposals should consider the principle of economic growth and efficiency. The tax law should not work counter to goals of a particular jurisdiction. For example, there are many ways to measure income including what depreciation schedules should be used. A jurisdiction, such as the US, should not use a 20-year life for semiconductor equipment as that would be harmful to chip manufacturers (even though it would measure taxable income). If a jurisdiction, such as California, has a CO2 emission reduction target, it should consider how its tax law can help meet that goal. If a jurisdiction is giving tax incentives to burning oil, that would be counterproductive. A carbon tax with revenues used to reduce some other tax that is not efficient and/or to help reduce CO2 emissions would make sense.