2. VT Green Tax Shift & Common Asset Fund Dec. 7, 2004 UVM Green Tax course Public Administration 395: Melissa Bailey Thomas A. Benoit Sr. Amanda Dow Davis John Demeter Cheryl L. Diersch Gary Flomenhoft, Instructor Peter M. Freeman Andrew Jope John Mejia Rachel Marie Weston http://www.uvm.edu/~gflomenh/GRN-TAX-VT-PA395/

3. “There is nothing more difficult to carry out, more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For those who would institute change have enemies in all those who profit by the old order, and they have only lukewarm defenders in all those who would profit by the new order.” ---Nicolo Machiavelli, 1490

4. WHAT ARE GREEN TAXES? "PAY FOR WHAT YOU TAKE, NOT FOR WHAT YOU MAKE" "TAX WASTE, NOT WORK” Tax Nature, NOT Labor or Capital Environmental protection Economic Efficiency Using market incentives

5. Survey-EU Green taxes

6. EU Types of Green taxes

7. NW GREEN TAX SHIFT

8. Inventory of NE GREEN TAXES

9. NE GREEN TAXES

12. CURRENT VERMONT GREEN TAXES

13. GREEN TAX PRINCIPLES What is the goal of government? What is the goal of taxation? Can they be combined?

14. Rival} Non-rival} Excludable Non-Excludable Market Good: Food, clothes, cars, land, timber, fish once captured, farmed fish, regulated pollution Potential market good (Tragedy of the “non- commons”)but inefficient: patented information, Pond, roads (congestible), streetlights Pure Public Good: climate stability, ozone layer, clean air/water/land, Biodiversity, information, habitat, life support functions, etc. Open Access Regime: (misnamed: Tragedy of the commons) Oceanic fisheries, timber etc. from unprotected forests, air pollution, waste absorption capacity Non-rival, congestible Private beaches, private gardens, toll roads, zoos, movies Public beaches, gardens, roads, etc.

15. Taxation + Provision of Public Goods TaxationPublic Goods Green Taxes

16. GREEN TAX PRINCIPLES 1.Internalize external costs 2.Behavioral Approach 3.Revenue Generating

17. EXTERNAL COSTS? ECONOMY LAND USE DEPLETION POLLUTION (Not to mention social costs)

18. PRICES LIE

19. Vermont GPI study

20. GDP AND HAPPINESS

21. 1. Cost Internalization Pigouvian theory (AC Pigou) external costs Polluter pays principle restoration costs Least cost abatement- cost required to abate pollution

23. 2. Behavioral Approach WHATEVER YOU TAX YOU GET LESS OF (WITH ONE EXCEPTION) WHAT DO WE WANT LESS OF? WHAT DO WE WANT MORE OF?

24. TAX ON BUILDINGS/JOBS S1S1 D P Q p1 q1 CS PS

25. S1S1 D P Q p1 q1 CS PS tax S2S2 p2 q2 tax Deadweight loss TAX ON BUILDINGS/JOBS

26. Inelastic demand-gasoline (few subs.) S1S1 D P Q p1 q1 CS PS

27. Inelastic demand-gasoline S1S1 D P Q p1 q1 CS PS S1S1 tax S2S2 q2 p2

28. Elastic demand-movie (many subs.) S1S1 D P Q p1 q1 CS PS S1S1

29. Elastic demand-movie S1S1 D P Q p1 q1 CS PS S1S1 tax S2S2 p2 q2

30. TAX ON LAND - no production cost D P Q S P1P1 Q1Q1 “Buy land, they ain’t making any more.” -Will Rogers

31. TAX ON LAND - fixed amount D P Q S P1P1 tax? Q1Q1 “Buy land, they ain’t making any more.” -Will Rogers P*

32. TAX ON LAND - no reduction D P Q S P1P1 tax? Q1Q1 “Buy land, they ain’t making any more.” -Will Rogers P* Q* tax Ps

33. Modern Economists Right: “Land tax is the least bad tax” ---Milton Friedman Green: “Taxation of value added by labor and capital is certainly legitimate. But it is both more legitimate and less necessary after we have, as much as possible, captured natural resource rents for public revenue.”---Herman Daly Left: “Usurious rent is the cause of worldwide poverty”---Joseph Stiglitz

34. Green tax increase How to spend the money? Dedicated revenues: ~$5 Million Deficit reduction: none in VT Other tax relief: ~$500 Million 3. Revenue Generating

35. GREEN TAX CRITERIA 1.ECONOMIC EFFICIENCY 2.DISTRIBUTIVE EQUITY 3.ENVIRONMENTAL PROTECTION 4.EASE OF ADMINISTRATION

36. Vermont Budget for 2004 John Demeter $3,574,308,641 or about $3.574 Billion

37. Sources of Revenue: Federal Funds:$1.083 B Tax Dep’t Revenue$1.063 B Property Value Taxes$741.6 M Other Fees/Taxes$677 M

38. What does ‘Other’ include? Motor Vehicle Fees Certain Gas and Fuel Taxes Licensing and Permitting Fees by ANR, Sec. State, judiciary, and others

39. Complexity Tax Department – 37 line items in Revenue account reports, each with own set of rules and regs, not including property value tax. Fees – Hundreds, if not thousands, administered and collected by various agencies. No compilation list exists. 1/3 of updated fees are reviewed annually by the JFO.

40. Complexity, continued Few reliable sources of information exist. Must master the Bureaucratic shuffle to begin to assemble worthwhile info.

41. A. $2.117 B dollars instate revenue Starting point for green tax shift. Goal of revenue analysis: Q. How much revenue raised in VT?

42. 2004 Vermont Revenue

44. 2004 Vermont “Green” Revenue

45. Energy Taxes Andrew Jope Rachel Weston Peter Freeman

46. The Case for a VT Carbon Tax

47. Rationale Simplification –Replace existing energy taxes with a single tax on carbon content of fuels. Behavioral Change –Encourage reduced consumption of fossil fuels and reduced CO2 emissions. Revenue Leveraging –Make use of revenues to purchase energy saving efficiencies and stimulate growth.

48. Current Energy Taxes Rate‘04 Revenue Gasoline Tax$.19 / gal71.9 Diesel Tax$.16 / gal18 Sales Tax on Comm. Energy 5%* (with exceptions) 15 Utilities Gross Receipts.3-.5% of gross oper. revenue 5.7 Fuel Gross Receipts.5% on retail sales 5.5 TOTAL116.1

49. Carbon Tax: Pro/Con PRO Broad influence- consumers, transport. Low transaction costs Ease of administration Produces recyclable revenue CON Emissions reductions not predictable Vulnerable pricing due to inflation/ price shocks Not targeted to reduce all GHG’s. Regressive

50. Carbon Tax Proposal $100 per ton tax on carbon content of fuels. Applied at point where fuels enter Vermont economy. Revenues recycled back to taxpayers (individual and commercial). Comparable tax on nuclear and large hydro (market competitiveness).

51. Revenue Estimates $100/ton + tax on hydro/nukes Minus existing energy taxes Total 364,500,000 248,400,000 Residential 112,400,000 76,600,000 Commercial 71,500,000 48,800,000 Industrial 53,000,000 36,100,000 Transportation 127,500,000 86,900,000

52. Price Effects on Fuels 2004 Estimate Gasoline ($ per gallon).29 -.19 =.10 net increase Electricity (cents / kWh).01 (less existing) Natural gas (cents/ therm)17.2 (less existing) Fuel Oil ($ per gallon).34 (less existing) Coal ($ per ton)76 (less existing)

53. Energy Savings and CO2 Reductions Energy Use (TBTU)125.56 Energy Saved (TBTU)4.98 GHG Emissions (CO2 equiv. tons) 9,702,000 GHG Emissions Reduced (CO2 equiv. tons) 386,000

54. 2004 Energy Tax Revenues (Existing) 2004 Total energy revenue: $259,269,147

55. Energy Tax Revenues (Including Carbon Tax) 2004 Revised Energy Revenue: $521,540,000

56. Energy Tax Revenues (Including Carbon Tax)

57. Trading Carbon Offsets Emerging markets for emissions/ sequestration trading: –Kyoto Signatory nations –EU cap and trade system (2005) –Chicago Climate Exchange –Northeastern States cap and trade system (2005) Allows for trading CO2 emissions with carbon sequestering “sinks.” “the biggest commodities market in the world.” -R. Sandor (Northwestern Univ. / CCX)

58. Carbon Trading Potential for VT Agricultural/Forest Land States (NE,AK) have begun quantifying sequestration potential of land. VT forests hold a carbon stock of 492.6 MMTC (1997). Carbon tax revenues can be used to quantify capacity/pool land holdings/define compliance mechanisms for trading. US farmers can sequester 200 MMTC annually / add $4-6 billion gross income (10% increase in average net farm income).

59. Shifting Transportation With a rise in the price motor fuel, drivers may seek other options.

60. High Speed Rail Vermont has been designated a HSR corridor as part of the Boston-Montreal Corridor. Infrastructure in place

61. Funding for HSR Estimated cost ~ $300 million in capital investments. Decrease new road and highway construction and re- allocate for HSR

62. Alternative Fuel Vehicles (AFVs) To make Vermont a leader in clean fuel vehicles, need: 1. Initiative 2. Money 3. Effective approach

63. Initiative Vermont has not been subjected to federal regulations due to its small size and clean air But has taken voluntary measures –Clean cities coalition (VCCC)  However, more must be done

64. Money VCCC has been severely under funded –$40,000 operating budget in 2004 With no money, program is largely symbolic Large funding increases necessary to achieve program’s goals  Carbon Tax to the rescue

65. Effective Approach Automobile consumer market stubborn Gas prices not enough to induce change AFVs must be viewed as desirable product Since market for AFVs is currently weak, must get vehicles on the road through other means  Fleet Conversions

66. Fleet Conversions Municipal and Private Target “niche markets” for cost effectiveness –Affects most polluting vehicles –Minimizes cost of, and maximizes use of new infrastructure development –Maximizes technological upgrading  Many markets in Vermont, especially Burlington

67. Niche Markets in Burlington 1.Public busses 2.Vehicle lease programs for commuters 3.University of Vermont Campus 4.Taxi services 5.Burlington International Airport

68. Vermont Property Related Taxes Melissa Bailey

69. Vermont Property Taxes: TaxRate2004 Revenue Property Transfer Tax.5%- 1.25%$33,951,657 Speculative Gains Tax 5-80%$4,288,132 Current Use Penalty Tax 10-20%$404,155 Property Tax (State Portion) avg 1.52%$741,600,000

70. Vermont Property Taxes

71. Property Taxes Are actually 2 taxes: on land and on improvements. Provide a steady and reliable source of income. Account for 1/3 of VT’s state revenue. Can influence development patterns.

72. Land Value Taxation: Shifts property tax liability from improvements to land. Articulated by political economist Henry George (1879). Equity, Efficiency, Environmental Protection.

73. Effects of Land Value Taxation: Removes “market disincentive” for making improvements. Reduces land speculation. Reduces sprawl, encourages compact development. Society benefits from societal value of land.

74. Applications of Land Value Taxation: 700 cities worldwide use a graded property tax system Denmark (1844) Canada (1903) South Africa (1914) Pennsylvania (1913)

75. Land Value Taxation in Vermont? Currently 2/3 of VT Property Tax Revenue comes from tax on the value of buildings. Buildings assessed at $33.2 Billion and Land assessed at $14.9 Billion. LVT rate of 5% would generate the current level of revenue for the state.

76. Recommendations: Apply LVT only in “growth centers.” Reverse current ratio to generate 2/3 of state property tax revenue from taxes on land. Work with established growth boundaries being developed by the Vermont Smart Growth Collaborative. Revenue Neutral.

77. Proposed Property Tax Revenue

78. WASTE TAXES- Thomas A. Benoit Sr. Past Taxes and Projected Changes

79. Solid Waste Operators of Solid Waste facilities and Transfer facilities pay a $6 per ton tipping fee. Vermonters generate approximately 3.4 pounds per capita every day Most Vermonters pay for waste disposal on a per capita or flat fee rate. Vermont has two permitted lined landfills that will reach capacity in about seven years. Vermont has a $.05 deposit on glass, metal, paper or plastic containers of beer, malt beverages, mineral waters, mixed wine drinks, soda water, and carbonated soft drinks.

80. Hazardous Waste A fee of one cent per gallon is assessed on all motor vehicle fuels sold in the state for the purpose of providing cleanup funds for leaking petroleum storage tanks. A tax is assessed on hazardous waste in Vermont when the waste is shipped, or when facilities recycle, treat, store, or dispose of hazardous waste. The tax is based on the quantity of the hazardous waste and its ultimate destination (e.g., whether it is destined for recycling, treatment, or land-disposal. The standard fee for Underground storage tanks (USTs)is $200 per tank, but some gasoline outlets and municipalities that use smaller amounts of motor vehicle fuel pay $100 per tank. Petroleum cleanup fees and tank assessment fees are deposited into the Petroleum Cleanup Fund.

81. 2004 Current Revenue for Total Waste: $5,901,672

82. GREEN TAX RECOMMENDATIONS Solid Waste Increase the solid waste tax from $6 per ton to $12 per ton ($3,243,041 to $5,188,866 assuming a 20% reduction in waste due to the increase). Institute a mandatory recycling and enforcement program. Institute statewide mandatory Pay As You Throw (PAYT) programs with a.13/pound PAYT fee (approx $260/ton or $144,135,156). Increase funding for market development for recycled materials. Bottle Bill Keep the bottle deposit at 5 cents and add all beverage containers to the bottle bill.

83. GREEN TAX RECOMMENDATIONS Hazardous Waste Increase the petroleum clean-up fee from one cent per gallon to two cents per gallon ($2,385,227 to $4,774,454). Increase compliance and inspection visits for tank owner ($300,000). Increase education and outreach to tank owners and the general public ($200,000).

84. 2004 Revised Revenue for Total Waste: $155,005,344

86. INTENDED OUTCOMES Solid Waste Decrease our current rates of fill for the two permitted lined landfills. Mandatory recycling and enforcement will level the playing field for all those involved. Recycling will take place at all levels (residential, business and institution). PAYT will create personnel incentives to reduce waste generation and increase recycling. Markets development will make waste reduction a very appealing option. Bottle Bill Increase recycling and generate more materials for the recycling markets.

87. INTENDED OUTCOMES Hazardous Waste Regulated tanks will be operated and maintained properly due to increased inspections, which will result in fewer leaking tanks. Current sites will have more resources to help eliminate environmental pollution. Tank owners and the general public will be more aware of improper maintenance and contamination.

88. Pesticides, Fertilizers, Air & Water Pollution Health: Our Most Important Asset John Mejia Amanda D. Davis Cheryl Diersch

89. Pesticides, Fertilizers, Air & Water Pollution Health: Our Most Important Asset When the well’s dry, we know the worth of water. Ben Franklin Man can live about forty days without food, about three days without water, about eight minutes without air, but only for one second without hope. Anonymous Treat the earth well, It was not given to you by your parents, It was loaned to you by your children. Native American Proverb

90. The Problem Discharges into Lakes, Rivers, etc. Harmful Air Emissions Consumption of Hazardous Household Products Family Farms Struggling Due to High Costs of Pesticides and Fertilizers

91. Where will VT be in 20 years if we ignore the problem? California Model: DETERIORATED HEALTH AND ENVIRONMENT Increased Cancer Rates Increased Infant Mortality Toxic Water SMOG Loss of Family Farms

92. Where could VT be in 20 years if we address the problem? Slovenia Model: HEALTHIER FAMILIES & CLEANER ENVIRONMENT Decreased Infant Mortality Movement towards Organic Anti-GMO Population - 2 million Vibrant Tourist Industry Recently Seceded

93. Strategies for Behavioral Change Education – Raise Public Awareness Reduce Consumption – Price Adjustments Reuse – “Gray Water” Irrigation Innovation – Sustainable & Eco-Friendly Practices

94. Air Pollution The Problem 1.Most air pollution is from non-point sources. 2.Due to the rural nature of our state, 50% of energy expenditures in VT are for transportation and this accounts for most of the air pollution in the state. 3.This transportation related pollution has been dealt with by the Carbon Tax explained earlier.

95. Air Pollution Air Toxics Program Title V

96. Title V - Construction Basic Fee ScheduleTypeAmountNew Rate Permit ApplicationMajor Stationary$11,500$15,000 Non-Major Stationary$750$1,000 Indirect Source$4,000$5,000 Minor AmendmentClerical$100 Technical$500 Supplemental Fee Schedule for Non- Major Stationary Sources Type AmountNew Rate Engineering Review $1,460$2,000 Air Quality Impact Analysis Screening Model$600 Refined Model$1,170$2,000 Observe and Review Emissions Testing $1,750$2,000 Audit Performance of Ambient Air Monitoring $1,750$2,000 Implement Public Comment Requirement $500

97. Title V - Operating Emitters have to pay for permission to release harmful chemicals into the atmosphere. They pay fees to the state to cover the cost of monitoring their businesses and then get charged by the amount of pollution emitted. Usually by the pound or gallon of chemical.

98. Air Toxics - Definition "Air toxics" refers to 188 hazardous air pollutants (HAPs) listed in the Clean Air Act (CAA) of 1990. HAPs include industrial chemicals, solvents, metals, pesticides, and combustion by-products. Top 10 air toxics exceed health-based standards in Vermont. 1.Acetaldehyde 2.Formaldehyde 3.Benzene 4.Methylene Chloride 5.1,3-Butadiene 6.Tetrachloroethylene 7.Carbon Tetrachloride 8.Mercury 9.Chloroform 10.Styrene

99. Air Toxics Mobile Sources: On and off road vehicles and aircraft. Area Sources: Burn barrels, gasoline filling stations, woodstoves, paint stripper, surface coatings, drycleaners, industrial boilers, etc. (small stationary sources) Point Sources: Manufacturing operations (large stationary sources).

100. Air Toxics – Management UVM Cargill OMYA Burlington Electric Middlebury College These 218 Point Sources released 11,086 tons of toxics into the air in Vermont during 2000. Entities producing more than 5 tons of “criteria” air pollutants must register with the state. These include approximately 218 entities including:

101. Air Toxics Revenues In 2003 VT raised $153,576 in revenues from toxics. Basic Fee ScheduleAmountNew Rate For facilities with emissions greater than 5 tons but less than 10. $ 0.016 per pound of emissions of SO 2, PM, 00, NOR, or Hydrocarbons $250 plus $0.032 per pound For facilities with emissions greater than 10 tons. $840 plus $ 0.016 per pound $1,680 $ 0.032 per pound Hazardous Contaminant Surcharge Fee assessed based on emissions with regard to public health. Please consult the Air Division for type definitions. Excludes emission from the combustion of fuels except for “solid waste” fuel. Type 1: $ 0.008 per pound emitted Type 2: $ 0.084 per pound emitted Type 3: $ 0.840 per pound emitted Type 4: $ 8.40 per pound emitted Excludes emission from the combustion of fuels except for “solid waste” fuel. Type 1: $ 0.08 per pound emitted Type 2: $ 0.84 per pound emitted Type 3: $ 8.40 per pound emitted Type 4: $ 84.00 per pound emitted Hazardous Contaminant Surcharge on the amount of fuel burned annually. Coal: $0.43perton Wood: $ 0.103 per ton #6 Fuel Oil: $ 0.0005 per gallon #4 Fuel Oil: $ 0.0004 per gallon #2 Fuel Oil: $ 0.0002 per gallon LPG: $ 0.0002 per gallon Natural_Gas: $0.87 per million ft3 Coal: $0.86perton Wood: $ 0.206 per ton #6 Fuel Oil: $ 0.001 per gallon #4 Fuel Oil: $ 0.0008 per gallon #2 Fuel Oil: $ 0.0004 per gallon LPG: $ 0.0004 per gallon Natural_Gas: $1.74 per million ft3

102. AIR EMISSION FEES

103. Current Water Taxes Water Discharge Fee –Application for discharge permit is $100 –Application review fee ranges from $50 to $30,000 Stormwater Fee –Administrative fee of $100 –Application review fee $300 per acre of impervious surface in a Class B watershed $1170 per acre of impervious surface in a Class A watershed –Annual operating fee $50 per acre of impervious surface in a Class B watershed $235 per acre of impervious surface in a Class A watershed

104. Price Changes Current Water Discharge Fee $100 permit $50-$30,000 review fee Stormwater Fee $100 administrative operating fee $300-$1170 application review fee $50-$235 annual operating fee Revised Water Discharge Fee $300 permit $150-$90,000 review fee Stormwater Fee $300 administrative operating fee $900-$3510 application review fee $150-$705 annual operating fee

105. Water Consumption Fee: Part I First 100 gallons of water used per household will be free (as it already is), but every gallon thereafter will be subject to the 1 cent per gallon fee. Currently an average household consumes about 200 gallons of water per day.

106. Water Consumption Fee: Part II Ease of Administration –Meters already in place on houses. –Meters can easily be placed on wells. Equity –Because the first 100 gallons will be free of charge, only excessive use of water will be taxed. Economy –A Water Consumption Tax will generate an enormous amount of money which can displace other taxes. Environment –Taxation on the consumption of water promotes efficiency and conservative use. It also encourages recycling, reuse, and innovation.

107. WATER RELATED FEES

108. Pesticide & Fertilizer Revenues Product registration fee Current $75.00 Proposed $300.00 Dealer’s License & Application Fees for Pesticides $41,000$82,000 Fertilizer product registration fees @ $15.00/nutrient max. $105.00 @ $30.00/nutrient, max. $210.00 Fertilizer tonnage tax@ $.25/ton with a min. of $50.00 @ $.50/ton with a min. of $100.00 Total $932,000$3,203,000

109. Sales Tax Exemption for Agriculture 6.0% Sales Tax Exemption for Agricultural Use of Pesticides and Fertilizers Current Revenue Fair Tax Proposal Green Tax Proposal Farmers, Nurseries, Orchards, etc $0.00$1,100,000.00$0.00

110. Total Current -$932,000 Proposed - $3,203,000

111. Benefits of Our Proposed Change Healthier Vermonters Pure Water Fresh Air Increased Tourism Family Farms Flourish In Vermont! The GREEN Mountain State Prevails!

112. Resources http://www.chem.unep.ch/pops/POPs_Inc/proceedings/abu-dhabi/KOVACS.html http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=108&subsecid=900003&contentid=253035 http://cpr.radicaldesigns.org/article.php?id=210 http://www.anr.state.vt.us/air/Planning/docs/rptFacEmissionsTotal-2000.rtf http://www.vtwaterquality.org http://www.vpirg.org http://www.pesticideinfo.org/Docs/ref_general2.html#ChemName http://www.foodfirst.org/who/ http://www.serconline.org/pesticides/fact.html http://www.serconline.org/pesticides/index.html http://www.foodfirst.org/pubs/backgrdrs/2004/s04v10n3.html http://www.pesticideinfo.org/Detail_Country.jsp?Country=Sweden#ChemReg

113. Offsets for a Green Tax Shift John Demeter

114. Additional revenue from Green Taxes $500Million– where should it go? Offset individual income tax? Offset Corporate/business income tax? Offset Telecommunications tax? Other Recommendations? Offset Fed payroll tax?

115. Individual Income Tax? Over $400 M, 40% Tax Dep’t receipts over last several years Can eliminate tax on large percentage of filers for relatively small expenditure

116. Individual Income – Examples To eliminate income tax on x %, who earn…would cost… 52% of filers<$30K Income$19.6 M 71% of filers<$50K Income$72.2 M 100% of filersall income brackets –$380M - $420M, depending on year

117. Drawbacks of Income tax Offset State Income tax is progressive enough that lowest income filers have little or no liability. Offsetting Income tax would not help compensate for higher fuel costs.

118. Corporate/Business Income Tax? Could potentially be eliminated Left alone for now –Businesses derive benefits from offsetting FICA –Law of unintended consequences –Current work being done to change corporate taxation, requiring Unitary Combined reporting to crack down on income-shifting

119. Sales and Use Tax? Considered ‘green’, as it taxes throughput and waste. Left alone for now. Must be reviewed and revised to tax environmentally damaging products more heavily than benign ones. Review exemptions, leave only those on necessities used by all people.

120. Federal Payroll Taxes FICA – Federal Insurance Contributions Act Part 1 – Social Security/OASDI –(Old Age, Survivors, Disability Insurance) –12.4% of all wages paid up to $87,900. Ceiling increases to $90,000 in 2005. –Half paid by employer, half by employee, unless self –employed.

121. FICA Taxes, cont’d Part 2 – Medicare –2.9% on all wages – no ceiling –Half paid by employer, half by employee, unless self employed. Total of 15.3% of wages paid to FICA -7.65% each by employer and employee -(over 90% of Vermonters are unaffected by ceiling)

122. Why FICA? Better direct offset than income taxes. Easy to measure due to federal reporting requirements. Can reimburse based on wages and taxes paid, starting at the bottom of the income scale. Better for business: 7.5% tax reduction

123. Examples Income employee VT income tax FICA employee FICA employer Self- employed $10-$15K0$956 $1912 $15-$20K$79$1340 2680 $25-$30$459$2104 $4,207 $30-$35K$633$2486 $4972

124. Economic Benefits-FICA offset Returns income to those most likely to spend it, boosting local economy. Incentive for employment. Aids businesses as well as workers. If its favorable to employ or be employed here, that’s a Business-Friendly environment for Vermont!

125. Shifts tax from a ‘good’ to a ‘bad’! Revenue collected based on carbon emissions and/or water usage, which individuals and businesses can work to control. There is a financial incentive to make responsible decisions. Damaging impacts of payroll taxes are offset, boosting Vermont economy.

126. Design/Administration $2.6B revenue

127. Design/Administration $2.6B revenue

128. Design/Administration $2.6B revenue

129. 100% Green TAX shift-2004 Carbon$300/ton Land9.6% Waste$2/bag Water1c/gal >100gals Chem product fee $300 on pesticides $2.6B revenue

130. Conclusions Can shift to tax resources and waste without hurting and perhaps helping the economy. Can eventually simplify taxation and revenue generation enormously by shifting to a few broad based green taxes. Like anything else, all that’s missing is the political will.

131. VT COMMON ASSETS PERMANENT FUND Dec. 7, 2004 G. Flomenhoft, Adjunct Faculty UVM MPA program Research Associate, Gund Institute

132. COMMON ASSETS-NATURE

133. COMMON ASSETS-SOCIAL

134. ASSAULT ON THE COMMONS

135. Common Assets Permanent Fund Thomas Paine, Agrarian Justice 1797 “Men did not make the earth...it is the value of the improvements only, and not the earth itself, that is individual property...Every proprietor owes to the community a ground rent for the land which he holds.;...from this ground rent...I...propose to create a national fund, out of which there shall be paid to every person...a sum.”

136. Alaska Model: Alaska Permanent Fund (Share of the commonwealth)

137. Alaska Model: Alaska Permanent Fund

138. Sky-trust Rent Loop US Sky-Trust-CAP/TRADE PERMITS

139. Sky-Trust

141. VT ASSETS-Natural

142. Gemstones $1,000 Sand and gravel, construction $21,200,000 Stone: Crushed$22,800,000 Dimension$29,000,000 Talc, crudeNot released Total$73,000,000 Rent 10% $7,300,000 VT MINERALS-2003 “The meek shall inherit the earth, except for the mineral rights.”-J. Paul Getty

143. VT FORESTS FORESTS (cords- 2002) 791,035 x $50/ Cord = $39,551,750 x 10%= $3,955,175 Public Forests (2004) $622,371 x10% = $62,237

144. VT WATER-2004 WATER 1C/GAL>100 GALS $87,831,410

145. VT LAND-2004 VT LAND VALUE $14,928,311,688 RENT 1% $149,283,117

146. VT ASSETS-Social

147. VT Trust-US AIRWAVES

149. “They used to rob trains in the Old West. Now we rob spectrum.” Senator John McCain, Chairman, Senate Commerce Committee

150. VT Trust-US AIRWAVES

151. International Exchange Goods and Services $30 Trillion/yr Buying and selling of paper $1.5-2 Trillion/day =$500-700T/year 95% speculation in paper!

152. VT TRUST-US financial Speculation Current Trading Projected Tax Rate Revenue (Annual Rates) Volume AfterTax Volume (both sides) Stocks $11 trillion $7.3 trillion 0.5% $36.5 billion Government Bonds $41.6 trillion $27.7 trillion 0.1% $27.7 billion Corporate Bonds $22.1 trillion $14.7 trillion 0.1% $14.7 billion Futures Contracts $100 trillion $66.7 trillion 0.02% $13.3 billion Currency $200 trillion $133.3 trillion 0.1% $33.3 billion (worldwide) (U.S. share = 25%) Swaps $22 trillion $14.7 trillion 0.02% $2.9 billion Options Not available NA 0.01% NA Total US Revenue(.25% RATE)$128.4 billion x.21% Vermont Revenue $268,891,964 Source: Taxing Financial Speculation: Shifting the Tax Burden From Wages to Wagers by Dean Baker. February 2000. Ctre for Economic & Policy Research

153. WHO CREATES MONEY? (SEIGNORAGE) GOVT (CURRENCY) $600 BILLION7% BANKS (LOANS) $8 TRILLION93% TOTAL$8.6 TRILLION 100%

154. FRACTIONAL RESERVE ~3-5% FED RESERVE BANKPRIVATE BANKING SYSTEM $1000 DEPOSIT $1000 (5% OF $20,000 “on reserve”) LOANS $20,000 ASSETS INTEREST PLUS INTEREST! How the Federal reserve system creates a private banking monopoly cartel!

155. VT MONEY CREATION VT BANKS (LOANS) $3,574,450,000 1% RATE$35,744,500

156. VT INTERNET ACCESS WEB SERVERS AND EMAIL ACCOUNTS? ??????????????? Created by Public financing through DARPA. Share of access, not commerce:

157. VT Common Assets Permanent Fund

158. VT Common Assets TOTAL MINERALS-10%$7,300,000 PUBLIC FORESTS $62,237 WATER -1c/gallon)$87,831,410 LAND-1%$149,283,117 SPECTRUM-10%$161,965,394 SPECULATION-.25%$268,891,964 MONEY-1%$35,744,500 INTERNET ???????????? TOTAL $711,078,622 Interest rate 5%? $35,553,931 Dividend 1st yr $57

159. COMMON ASSET DIVIDENDS