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Australian Tax Research Foundation – research Study No 35
Available from the Taxation Institute of Australia. Phone:
(02) 9232 3422 or fax (02) 8223 0099.
The Australian Tax Research Foundation commissioned
ISF to write a report on ecological tax reform (ETR). The report investigated
the potential for ecological tax reform at the state and local government
level.
According to the report, environmental taxes could take the form of a
tax on ‘bads and nuisances’ rather than goods and services.
Other elements of ETR include the polluter pays principle, the user pays
principle, and internalising external costs. Environmental taxes may also
drive technological innovation and provide an alternative or additional
source of revenue for governments. The research for the project included
an evaluation of a number of potential environmental taxes in terms of
their economic efficiency, their effect on equity, and their impacts on
ecological sustainability and employment. The authors conclude that at
local government level, the identified taxes could be a valuable source
of revenue, responsible for a significantly greater share of total revenues
collected at this level of government. At the state government level the
report finds that environmental taxes could be a valuable additional source
of revenue, raising in order of $1.2 billion annually. This extra revenue
could be earmarked for programs to improve ecological and social sustainability.
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