Fix corporate tax competition with green taxes

Today's Financial Times has a subscriber-only article Europe's tax rivalry keeps multinationals on the move bemoaning tax competition and an eventual "race to the bottom" for corporate taxation.

Kitchen Linker says this is not a problem but a grand opportunity: replace corporate taxes (and taxes on increasingly mobile labor) with green taxes. Save the environment, economy, and state, all in one fell swoop!

Another FT article hints this is the way things are going:

French VAT is already at 19.6 per cent, and Germany had implemented some significant structural reforms that remained elusive in France. However the ministry was examining whether some of the tax burden on labour could be transferred, for example through environmental charges, he said.

France’s expression of interest in Berlin’s VAT experiment could be the first of many, according to economists.

“You can see that possibly even Britain is going that way with the debate on the environmental tax,” said Holger Schmieding, senior economist with Bank of America.

Excellent, now go faster, and also in America!