The Future of Consumption: The Solution

From: max_sawicky

Money spent by businesses for advertising reduces their net income. It is a cost of doing business and therefore should remain a deduction. Income received by those in the advertising business is and will remain taxable as income.

It is possible to construct a progressive consumption tax. This would be accomplished by allowing a deduction for net savings on a personal income tax form that would resemble the present one. The corporate income tax would be replaced with a value-added tax. There could be graduated rates, a generous standard deduction, and full taxation of inheritances. The interested reader is referred to recent books by Lawrence Seidman and David Bradford.

There is also a place to talk about environmentally motivated taxes (EMTs). In fact, these go more to the interests that spurred this discussion in the first place than taxes on consumption in general. As with consumption taxes, EMTs can be regressive and raise legitimate issues of fairness.

As I noted in a previous post, taxing or otherwise discouraging consumption doesn’t necessarily solve any problem we’ve discussed, since the money saved by forgoing consumption could spur spending by businesses on plant and equipment, leading to faster economic growth and more consumption down the line.

In closing, I would reiterate that the right focus, politically and on the merits, is on how to direct growth into socially beneficial directions, not on how to hold it back.

Happy holidays,
Max Sawicky

From: bill_mckibben

I’d just bow out with the simple observation that living a little more lightly on the earth does not detract from doing any of the other necessary things that need to be done—from fighting global warming to taking on poverty to…whatever. In my experience, it just makes you a little lighter and more fit for those fights, and fills your own life with a bit more joy. If that’s selfish, so be it. Happy holidays, all.


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