this article is a little heavy in places but is well worth a read. Unitax Farel Bradbury Farel Bradbury has been promoting Unitax for many years, and this version of an energy tax seems to have several advantages over other more recently proposed Green taxes and Carbon taxes. 'The Unitax alternative to VAT is absurdly simple: you just measure the net input of energy in units such as gigajoules into any geographical area and divide it into the public sector budget for that same area. This yields a Unitax of so many pounds sterling per gigajoule' The Unitax alternative to VAT or other taxes, national or local, is absurdly simple: you just measure the net input of energy in units such as gigajoules (eg 15,000,000 GJ per year) into any geographical area and divide it into the public sector budget for that same area (eg L40m per year). This yields a Unitax of so many pounds sterling per gigajoule (eg L2-67 per GJ, that is about 39 pence on a gallon of petrol, for an average UK rating district; and all domestic and commercial rates are abolished). Unlike sales, income or local council taxes, the Unitax is administered at the very few initial energy-supply points (and at points of import or export). Energy is already measured at the points of import and export, so there is little new bureaucracy and we are dealing with a bulk commodity which it is difficult to hide - so evasion is difficult while economies are to be welcomed. The Unitax works its own way through the systems of distribution and consumption without further paperwork, yet the amount paid is inescapably linked with the standard of living. That is the gist of it. Two further points arise. First, this is not just an 'energy policy'. It is true that we will 'save it', cut waste (and pollution), recycle, find alternatives, revolutionise transport, and the heat-pump will become economically viable. Because Unitax is raised at source - where the prime energy first has a price placed on it - it becomes a constituent of all other material resources: plastics, steel, fertilisers, paper, electric light - hence the term 'Resource Economics'. Nor is it a system of rationing for scarce commodities, although it may do that - I think it will moderate some of our more intensive and artificial uses of materials and the way we use capital intensive methods to oust labour. But energy must continue to flow where there is life; likewise we must raise taxes. Even if energy were abundant and free, therefore, Unitax provides an essential social valuation of resources linked at all times to the quality of life. Secondly, this is not just a welfare policy. It is true that the proposal includes a provision of a non-selective Basic Income for all citizens - at least in the developed stages of Resource Economics. This is because a certain amount of energy consumption is required to support life. Consumption above this 'threshold' will then vary with the quality of life: the higher the lifestyle, the more Unitax that is paid in that consumption. This threshold is the point at which the 'regressive' nature of so-called energy taxes becomes 'progressive' and the Basic Income is calculated as its energy equivalent (about L55 per week for all adults if all other taxes - including the funding of the Basic Income itself - were today replaced by a Unitax of about L15 per GJ). The Basic Income does away with much painful bureaucracy: replacing pensions, the dole, child allowances, student grants, etc. Such a distributive mechanism also holds out the solution to many modern problems - not least 'unemployment' - gives 'wages to housewives', minimum income, and paves the way to 'no-fault' compensation for loss and, important in this technological age, a copyright income. The 'poverty trap' disappears because you keep all you earn without forfeit and, of course, there are neither 'Black Economy' nor Social Security fiddles. Readers may also see the solution to the EC CAP problem: a Basic Income to farmers would allow free-market food price and distribution without intervention. 'It is quite wrong that revenue is raised on price or earnings or wealth; it should be derived from consumption which is prolific, not from the enterprise of labour and investment which is limiting' The Resource Economics Proposition has been designed as a comprehensive economics system. Indeed, it has yielded the proof of where classic economics have become screwed up and shows how national budgets may be balanced and world imbalances corrected. This age is characterised by 'consumerism' and needs this new set of rules. In context, it is quite wrong that revenue is raised on price or earnings or wealth; it should be derived from consumption which is prolific, not from the enterprise of labour and investment which is limiting. The one common constituent in all consumption is energy. It is not labour-added value that should be taxed (as by VAT), but energy-added value (by Unitax) if you want a happy economy. Incidentally, some people think that if you live in a cold climate you would pay more Unitax. Not so. Because more energy is used (for heating), the tax is distributed more thinly. For example, if you double the consumption, the Unitax rate is halved yet yields the same revenue. So, broadly, everyone pays the same Unitax. Unitax is not like an old-fashioned energy tax and this dynamic mechanism also adjusts for changing efficiency of consumption as time goes on. Farel Bradbury, 70 Silverdale Road, Royal Tunbridge Wells, Kent TN4 9HZ (tel 01892 540178; e-mail: [EMAIL PROTECTED]). Replacing VAT with Unitax Adapted from a booklet entitled 'Unitax, a new environmentally sensitive concept in taxation' by Malcolm Slesser (published by Hydatum, PO Box 4, Ross-on-Wye, HR9 6EB, tel 01600 890599, fax 01600 4514; ISBN 0 905682 47 5). Unitax could be phased in, leaving much of the tax structure intact for the moment. The obvious candidate for replacement is VAT. This is so for several reasons: - Unitax operates like VAT in its effects - adding costs only as each processing step uses additional energy. The effect of VAT is to tax labour, whereas Unitax does not. - Value-added taxes place an enormous administrative burden on the operation of industry and commerce. Unitax places no such burden. - Unitax can be slowly increased as taxes on earnings are reduced. - VAT is a mandatory tax in the EC. If Unitax is to be introduced it should be at the EC level, though there is a case for having a trial in one country first. - Unitax gets round the internal European arguments as to what should and should not be value-added taxed (eg children's clothing, houses etc). If Unitax were initially only required to replace VAT and similar taxes on expenditure (other than duty on wines, beers and spirits) then the amount to be raised by Unitax (again taking the UK as an example) would be some L50 billion per annum. To replace this, Unitax would have required to be L7.7 per Gigajoule. At this rate, petrol would be much the same price as now, though electricity could cost about 2.2 times as much with present methods of generation. 'Unitax would have required to be L7.7 per Gigajoule. At this rate, petrol would be much the same price as now, though electricity could cost about 2.2 times as much' Unitax is an idea whose time may have come, but nonetheless getting it implemented will be a slow process. Because many people will lose their livelihood if Unitax comes in (accountants, taxmen and some civil servants) there is bound to be an opposition quite unrelated to the merits of the concept. Employment in a resource tax economy Farel Bradbury was quoted approvingly by Lord McNair in a House of Lords debate on sustainable development. The following extract summarises his gloss on the Unitax system and its implications for the labour market, quoted in Hansard (March 2nd '94). The rate of the new tax [should be] set high enough to enable a basic income to be paid to each citizen, this, when fully implemented, abolishing all existing social security payments. That is clearly another area where political decisions would be paramount. However, I see the basic income as an integral part of the resource economics proposition. One obvious and major effect of this change would be to alter the balance between people and machines. Wages and salaries would most likely fall by the amount of the basic income. People would also be cheaper to employ because, when UNITAX is fully implemented, the additional costs of employment such as national insurance and PAYE will have been eliminated. Reducing the cost of employing people while increasing the cost of energy, leads to more employment. It would also raise the priority business managers gave to energy conservation. This would, I am sure, go far to redressing the present imbalance between intensive, high input agriculture with its reliance on relatively cheap energy and more labour intensive low input agriculture. The pressure for change to more sustainable agriculture producing more wholesome food would have the support of market forces and so would occur-dare I use the word?-naturally. One further major benefit of the basic income is the 'flywheel' effect on the economy. Paying people to consume makes it impossible for the economy to reduce beyond a certain level. Used as the operating basis for our economic life, resource economics will bring about changes that I am sure most people in their heart of hearts, hope to achieve. Professor Malcolm Slesser, Centre for Human Ecology, 15 Buccleuch Place, Edinburgh EH8 9LN (tel 031 650 3470; fax 031 650 6520). Information about Unitax can also be obtained by contacting The Unitax Association, 50 New Road, Great Baddow, Chelmsford, Essex CM2 7QT. E-mail comments or new ideas to the Global Ideas Bank at [EMAIL PROTECTED] The Global Ideas Bank home page is at http://www.newciv.org/GIB/ Order the publications on which the Global Ideas Bank is based -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
