- Investigates the causes of economic imbalances.
- Investigates the effect of the global financial system and/or the monetary system in fostering a sustainable economy.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.
The Vermont Green Tax and Common Assets Project researches, educates and disseminates information on recovery of unearned income from common assets such as the monetary system, speculation, land, minerals, spectrum and other resources. In addition we investigate green taxes on throughput including depletion, land use, and pollution, which are ignored by market economics. These sources of income are a better alternative to taxing productive activities such as income, wages, excise, sales and building construction that create disincentives to productivity. By taking the profit out of speculation in finance, land, and natural resources, investment is directed towards real production and real goods. Additionally, we investigate the feasibility of redirecting some income from common assets to citizens in the form of a dividend, similar to the Alaska Permanent Fund annual dividend which contributes to Alaska’s standing as the state with the lowest level of wealth inequality in the U.S.
In fall of 2012, we have been working on two fronts, removal of subsidies for fossil fuels, and removing the penalty on construction and development in Vermont "Downtown" development districts.
We met with the Tax department chief economist and long time project partner VNRC (VT Natural Resource Council) to investigate the impact of the land value tax shift in Downtowns on the statewide education tax. We confirmed there would be no reduction of funding for the education tax, which is a key element to ensure viability of the land tax reform. Since the city of Newport voted in favor last spring, we are now developing a legislative strategy to get this tax bill through the legislature this spring. There is predicted to be about $500 million in EB-5 money coming into the Jay Peak/Newport, VT area in the near future, so this tax reform is timely, to prevent rampant land speculation, as well as encourage infill development in the Downtown. Planner Paul Dreher believes the land value tax shift is conducive to the new "form-based" code for local planning efforts, which was adopted in Newport.
The Tax department has stalled moving ahead with legislation on this issue this year. Therefore we have scheduled a meeting with the Developer of Jay Peak and downtown Newport. Without a constituency pressing for land tax reform the politicians are risk averse from any new initiative.
As requested we have been meeting with more free enterprise/conservative groups. We have recently (May 2013) been in contact with the assistant for Bill Stenger of the Jay Peak Corporation, which is the largest EB-5 funded project in the US. They have already completed a big upgrade of the Jay Peak REsort and are working on renovating the city of Newport, VT. They are very interested in the land tax reform for the Newport downtown and we are counting on them to help with legislation in Jan, 2014.
On the issue of weatherization and energy efficiency, we are working with the energy project manager for VNRC to devise a funding mechanism for the weatherization of 60,000 homes in Vermont as called for in a recent statute: 10 V.S.A. § 581: Building efficiency goals. In our subsidy reform study funded by Walker last year we found a $45 million subsidy for residential fuels that could be used to finance weatherization. The other options are increase gross receipts tax, surcharge on regulated fuels, and a carbon or BTU tax.
After lengthy meetings and analysis to determine the ideal method for funding building thermal efficiency, the thermal efficiency task force recommended a 10c per gallon tax on unregulated fuels such as Kerosene, heating oil, and propane. Since the Governor opposed this measure the legislature switched to increasing the Gross Receipts tax, but it looks like no new tax measures will pass this year for energy.
Since the legislature did not appropriate any funds, we participated in the Treasurer's capital gaps study which is ongoing this winter. As a result of our participation, the Treasurer has agreed to divert $10 million of state cash funds to VEDA (VT Economic Development Authority) for commercial renewable energy projects. This requires legislation to allow this appropriation, and is being submitted in House bill H.385. House bill H.395 passed and VEDA is being provided with the funds as originally suggested by project Manager Gary Flomenhoft.
Project manager Gary Flomenhoft was interviewed on local channel 3 about the recent expiration of the production tax credit for wind power, in light of job losses at local wind measurement company NRG. He explained that we first subsidize fossil fuels, and then we need offsetting subsidies for renewable energy, so we pay twice. He then pointed out that eliminating all energy subsidies would create a more level playing field, a more free market for energy, and would save tax money.
Fees for extraction of groundwater are still being considered in the Senate Finance committee, and testimony is forthcoming on that issue. Public water supplies pay an extraction fee, but private bottlers and other businesses don't.
We spent several months working with the VT Monetary Policy Committee, and developing a New Economy Coalition dealing with new finance, ownership models, and recovering the value of common assets. House Bill S.55 proposes a study of consolidating state lending and banking functions, and considering a public partnership bank. We have done extensive analysis of VEDA, Bank of North Dakota, and current state depository TD Bank to provide information to the Senate Government Operations Committee and State Senator Anthony Pollina the primary sponsor. We are in the process of doing an input/output model of the impact of a state bank using IMPLAN with the help of the Political Economy Research Institute (PERI) at UMass.
When market prices do not reflect environmental costs, polluting or depleting products are consumed in greater quantities, and society must pay for these costs through taxation, regulation, lawsuits, health impacts, and other means. Green taxes and common asset fees are market-based solutions that include the true costs of depletion, land use, and pollution into the price of products, thereby correcting imbalances in consumption that result.
The financial meltdown has exposed how the use of money and land as speculative commodities resulted in near destruction of the free-market economy. Removing the financial incentives for speculation and redirecting it to free enterprise, entrepreneurship, and other creation of real goods and services is one of our goals.
This project addresses climate change, peak oil, financial system instability, speculation and many issues of national importance. States are the laboratories of democracy, and Vermont has pioneered many policies such as the Regional Greenhouse Gas Initiative (RGGI) and our unique electrical efficiency utility, Efficiency Vermont. Green taxes and common assets have powerful implications for environmental enhancement, economic stability, and reduction of wealth inequality. Our program will compel inherently polluting and depleting industries to compensate Vermont citizens for the loss of ecological quality. This compensation could provide a base income for every Vermonter, helping to insulate them from events such as an economic downturn. Business will also benefit if a portion of these revenues replaces payroll taxes and other regressive taxes. If successful, this project will demonstrate to the rest of the nation and the world the power of ecological market mechanisms.
WE have submitted extensive testimony on various issues to the legislature, tax department, VNRC, and other agencies this year including groundwater extraction, land value tax shift in Downtowns, thermal energy tax for weatherization, and public banking and finance.
(Check sent: 7/2/2012)