Thursday, February 09, 2006


The Purpose of Taxation

What is the purpose of taxation? Is it a chance for local government to 'right the wrongs' of the private sector? Should it be used to internalize the externalities and equate MSC=MSB? Or should it just be a way for government to "earn" money for its services?

Well here is a new approach taken by the folks of Oakland, CA.

The City Council of Oakland has decided to tax local businesses for litter. Yes, the litter that comes from fast food joints, liquor stores, and convenience markets will now be taxed. Does anyone else see this as a problem?

It is like taxing someone's possessions for the potentiality to become litter. Like taxing the water because it could become polluted. Shame on you water, you should be more socially reponsible.

Additionally, this taxation takes away all individual responsibility to not litter. Since individuals no longer have to pay the price(fines and penalties) to clean up after themselves, what incentive do they now have to not litter?

Who is responsible for the misusage of wrappers, cups, and other materials when the consumer of these goods/services choose not to dispose of the litter in the proper location. Is it the manufacturer? The consumer? The distributor? The seller?

Apparently, in Oakland it is the seller and not the consumer.

Why aren't they penalizing the actual criminal activity?
We wouldn't have this problem if it was private lands!

Here's the story in the Oakland Tribune.

This situation is a lot like the condemnation of those Danish cartoons because they are provocative and could cause people (muslims) to act a particularly violent way. So we blame the cartoons and limit freedom of speech and the press, rather than blaming the real criminals and their violent behavior and rioting.

Here is Chirac on the subject:
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