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US Pollution Taxes and Israel

By Taylor Marvin

Via Brad Plumer, here’s a graph from a new IMF paper illustrating how low US revenue from environmental taxation is compared to other OECD economies:

I imagine this is a bit of an intellectual contradiction for congressional Republicans. On the one hand, any potential increase in US environmental taxation would be horrible policy that, like any tax increases in any circumstances, would necessarily reduce growth and lower total government revenue. However, Israeli environmental taxation as a percent of total revenue is one of the highest in the OECD, and to most Republicans the Israeli government is beyond criticism. I wonder if congressional Republicans see Israel’s fiscal policies as infallible as its foreign policy.

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4 Comments Post a comment
  1. The Elders of Zion #

    Huh? This post makes no sense.

    June 5, 2011
  2. admin #

    I thought it was fairly clear. Congressional Republicans generally reject any criticism of the Israeli government, but Israeli environmental policy is actually much more aggressive than anything congressional Republicans are willing to support and is much more in line with the OECD consensus on environmental policy. This is a contradiction in the Republican rhetoric towards Israel, and I think US politics would gain if Republicans considered the merits of Israeli domestic fiscal policy instead of limiting their discussion to Israel’s foreign policy. I support environmental taxation, and this post was intended as a criticism of the Republican ideological refusal to consider its value, not of Israeli policy.
    Thanks for the input.

    June 5, 2011
  3. The Elders of Zion #

    The discrepancy between the US and Israeli figures on that bar graph could be due to some explanations other than a zest for taxes on the part of Israeli policy makers. The individual income taxes and payroll taxes that account for the bulk of the US federal government’s tax revenue base could be proportionately smaller in Israel, making the pollution taxes seem huge by comparison.

    Of course, it’s possible that the above bar graph really does capture a difference in the two countries’ approaches to pollution taxes. If that’s the case, some of the underlying reasons might be due more to national defense concerns than to environmental concerns; much of the world’s oil comes from countries that are overtly hostile to Israel (e.g. many Arab nations, Iran, Venezuela, etc.), countries whose governments are pursuing nuclear weapons and bankrolling the terrorist organizations that are openly committed to a goal of destroying Israel and killing all Jews. Israel might have an interest in keeping money out of those guys’ pockets just as much as it has an interest in preventing acid rain, most of which would probably fall on Jordan and Iraq anyway. We might not have the same incentives here in the U.S.

    Also, I don’t think your characterization of Republican economic logic is very accurate. Hardly anybody has bought Laffer-style fiscal arguments for the last 25 years, especially on micro-oriented taxes. Furthermore, prominent Republican economists have publicly called for higher taxes on gasoline and things like that. It does happen.

    Lastly, regarding Israel’s supposed moral infallibility in the minds of Republicans, I don’t think that’s really the case. Strangely, conservatives, especially in the last decade, have taken the lead in defending Israel’s right to exist, although Democrats generally aren’t a whole lot different. Most mainstream Americans are likely to see Israel as an embattled ally in a proxy war being waged by terrorist-backers who want to come after us (by “us,” i mean the USA) after they’ve finished off those pesky Zionists. Fortunately, most people, not just Republicans, would rather recognize the big picture here than blast Israel for not giving in to the demands of a “government” that just signed a unity pact with the openly genocidal terrorist organization Hamas. Where you see opposition to that view is in the bizarre alliance between the hard left and the hardcore Islamists who like to subjugate women and execute homosexuals.

    Also, before some other comments call me a Republican apologist or something like that, I’ve voted straight Democrat my entire adult life.

    June 5, 2011

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