Restructuring Minnesota’s Tax System: Taxing Pollution Rather Than Work and Investment – Testimony

In February 1995, ILSR’s Vice President David Morris testified at the Minnesota Legislature on how Green Taxes could be used as a substitute for other forms of tax revenues.

Pollution taxes are an idea whose time has come.  Nations are discovering that their existing tax systems undermine economic efficiency and encourage pollution.  By raising the cost of resource inefficiency and lowering the cost of investment and employment, states and nations can encourage high productivity, higher employment and lower pollution.  Minnesota has been in the forefront of creative thinking not only in the environmental sector but in the tax sector.  Now it needs to put its collective thinking cap on and design a tax system that encourages economic efficiency and environmental protection.

We can and should engage in a statewide discussion about the kinds of pollution taxes and the kinds of tax reductions we should favor.  In some respects, we have the capacity to look before we leap.  We can use our modelling and analytical capabilities to evaluate the impact of various types of environmentally based tax shifting proposals.  We should use that capability to inform the statewide discussion and then, perhaps in the next legislative session, introduce legislation that reflects the outcome of this analysis and this discussion.

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David Morris

David Morris is co-founder of the Institute for Local Self-Reliance and currently ILSR's distinguished fellow. His five non-fiction books range from an analysis of Chilean development to the future of electric power to the transformation of cities and neighborhoods.  For 14 years he was a regular columnist for the Saint Paul Pioneer Press. His essays on public policy have appeared in the New York TimesWall Street Journal, Washington PostSalonAlternetCommon Dreams, and the Huffington Post.