'Green' taxes program a mix of good suggestions and wishful thinking, study shows

Study: Some proposals would only be effective if public transport became a viable alternative.

recycled bottles 298.88 (photo credit: Ariel Jerozolimski)
recycled bottles 298.88
(photo credit: Ariel Jerozolimski)
The proposals adopted last month for a series of "green" taxes to help the environment range from immediately applicable to inappropriate and inadvisable, an independent think tank stated in a paper released to Knesset members and policy-makers this week. The Macro - Center for Political Economics paper determined after careful review that several of the proposals would only be effective if public transportation became a viable alternative to private transportation - something the center judged would not occur for at least another decade. The proposals focus on several different aspects of fighting pollution and reducing greenhouse gases. Macro rated those proposals that place a heavier tax burden on cars which produce more CO2 as commendable as well as those which taxed heavier vehicles. A proposal to pay owners of old vehicles who turn in their cars to be scrapped NIS 3,000 should be adopted as soon as the funds could be budgeted, the position paper stated. The paper was written by Yoram Gabbai, CEO of Pe'ilim Investments and former head of government revenues at the Treasury. The Finance Ministry's Taxation Committee submitted its proposals in May 2007 and they were adopted in January. Gabbai also warned that the exemption from taxes for electric cars could be problematic as too little was known about the long-term effects of electric cars. It could be, he wrote, that the vast difference between the cost of gasoline-powered vehicles and electric cars would trigger high demand for them only to have it become clear in a few years that there were also environmental pollutants produced by electric cars. He suggested reducing taxes on electric cars but not eliminating them altogether. The Macro position paper did decry one entire set of proposals for "interfering with the employer-employee relationship." The committee had suggested leveling heavier taxes and fines on those who received a private parking space from their employers. However, Gabbai opined that such a move would merely produce obfuscation on tax reports and an increased demand on employers to cover fines incurred by employees. In general, the committee went much farther into the micro realm than was the global norm concerning green taxes, Gabbai wrote. Generally, countries tried to reduce greenhouse gases by imposing heavy taxes on cars, cigarettes and gasoline in order to discourage their use. However, the government had proposed sweeping taxes aimed at individuals. As such, it would be difficult to implement some of those types of proposals in practice, he wrote. Gabbai also deemed impractical a proposal to tax people based on how long they stood in traffic. When public transportation became a viable alternative, such a tax might become feasible, but not for the next decade or so, the center said.