I’ve been following “true cost pricing” ideas for a while, but somehow this idea of using resource consumption as a basis for taxation hadn’t occurred to me.

The most substantial tax revenue comes from taxing income, especially labour. The time has come for all political parties to rethink fundamentally this balance. We should gradually shift from taxing labour to levying taxes on the use of original resources.

There are two reasons. First, this would exercise more of a discipline on our use of original material, which would encourage us to conserve and replenish the source. Second, it would stimulate labour and encourage us to be creative and innovative in our use of original material. Current industry and business seem to be based upon using minimum labour in relation to resources used; we urgently need to invert the ratio into the minimum amount of resources used in relation to labour.

The idea has a certain appeal to me. Why, indeed, should labor – which is almost infinitely renewable – be the resource that is taxed the most? Why do we effectively penalize work and make labor more costly, and provide a perverse incentive to increase use of other resources to compensate? I think the author makes a good (though too brief) case that such an approach is utterly backward.