How to Balance the Budget While Slashing Taxes

A blog about business and economics.
Dec. 11 2013 12:15 PM

How to Balance the Budget While Slashing Taxes

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Don't worry, it's all fees.

Photo by Miguel Medina/AFP/Getty Images

I have a column about the absurdity of Paul Ryan agreeing to raise "fees" but not "taxes," but let's say for the sake of argument that I'm wrong. Taxes and fees are totally different, and it makes total sense to think fees are OK but taxes are evil.

Well we could solve an awful lot of problems that way. For example, I'd love to see us impose a greenhouse gas emissions fee to internalize the social cost of carbon dioxide. On top of that, I think a small additional fee on the use of gasoline would be justified. And of course road congestion fees on crowded highways. I used to think we should raise the alcoholic beverages tax, but now I think we should eliminate it entirely. Instead, let's put an "alcohol fee" in place that just happens to be higher than the current tax. Do the same for cigarettes. Legalize marijuana, but subject its sale to a rather hefty fee. It actually turns out that we could replace most taxes on labor and capital with a land occupancy fee, especially if we call it a "land occupancy fee" rather than a "land value tax."

With all these new fees in place, in other words, we'd have ample revenue to solve our fiscal problems and slash taxes at the same time. What's not to like?

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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