Tax Reform and the Environment

Transcript

MR. BILL GALE: There are many reasons to be interested in this issue. From the tax side, the President's tax reform panel continues to deliberate on ways to fix the tax system, and changes in environmental taxes offer one of the major, important ways to improve the structure of taxes. That alone makes environmental taxes worth considering. From the fiscal side, the nation continues to face large budget deficits, and environmental taxes are a juicy source of additional revenue, or at least could be. So that adds to the allure.

I think it's fair to say that in our current tax and budget situation, we do not have the luxury of ignoring reform options that can both improve the structure of taxation and raise the level of federal revenues.

But as the old late-night TV commercials used to say, but wait, there's more. What if we could get a policy that not only improves the structure of taxation and not only raises revenues, but also has the potential to clean up the environment? And just for good measure, if you call right now, we'll toss in the fact that it would probably also be good foreign policy, too.

So such is the potential of environmental tax reforms—good tax policy, good budget policy, good environmental policy, good foreign policy. This type of one-stop shopping is something that policymakers ought to be very interested in now and in the future, and our goal here this morning is to simply clarify and form what these choices are, what the framework ought to be to think about these issues.

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