Editor’s Note: The following exchange between Rob Dickson, vice chairman of the NM Governor’s Task Force on Our Communities, and Americas Program contributor Talli Nauman focuses on the value and meaning of a "balancing" framework for addressing sustainable development. Dickson challenges what he regards as the premise of Nauman’s article, "How to Balance Economic Development with Environmental Protection," which is the introduction to a series of six investigative features on the impact of development projects on the environment in the Gulf of California region of northwest Mexico. See http://americas.irc-online.org/am/3925. First published in Spanish, the series will soon be available in English.

Links to the complete series in Spanish can be found at www.ircamericas.org/esp/3254b.

Using Tax Policy to Build our Economy and Clean our Environment

By Rob Dickson
Task Force Vice Chairman

The Governor’s Task Force on Our Communities, Our Future does not agree with your premise that the economy and the environment need to be "balanced," which sounds like if one does better the other does worse.

Please review the following and let us know what you think. It’s about the economy AND the environment—they are linked. They will either both get worse or both get better. No trade-offs.

Thank you.

As powerful economic incentives and disincentives, taxes are among the strongest means the government has to motivate behavior. Is New Mexico taxing behaviors it wants to discourage, and rewarding those it wants to encourage? Or is our tax system actually creating powerful reverse incentives?

The Governor’s Task Force on Our Communities, Our Future believes it is possible that a revised tax system could accomplish the following:

  • Increase job creation
  • Reduce poverty
  • Increase capital investment in business
  • Jumpstart innovation
  • Clean up our air, soil and water and reduce global warming
  • Avoid passing costs on to future generations
  • Encourage prudent, efficient economic behavior, while strongly discouraging wasteful behavior
  • Make New Mexico more competitive nationally and internationally
  • The Task Force recommends that the State Legislature fund an analysis of our tax system and strategies for improving its effectiveness. This analysis could bring together the best economic minds in our state, nation and the world, to discuss and analyze the topics raised, and to write a report on their findings with recommendations for change.

    Right now, to raise revenues, New Mexico and its municipalities and counties are taxing work, income, property ownership, and purchase of products and services. Paradoxically, these are all activities we want to encourage yet we burden them with taxes.

    Meanwhile, pollution in many forms, waste, and the depletion of non-renewable or slowly-renewable resources, are not taxed directly. Moreover, they are placing real burdens on our health and planetary life-support systems—creating economic costs that are not being paid today, but rather passed on or "externalized" to future generations.

    Our grandchildren will face global warming, desertification, loss of fertile topsoil, loss of bee populations critical to crop fertilization, diminishing water tables, declining fisheries, and increasing asthma, obesity and other environmentally-related health problems.

    If these "externalized costs" were fairly accounted for, food products grown 1,000 miles from New Mexico, with heavy inputs of fossil fuels, packaging, polluting fertilizers, and health-compromising pesticides would not be less expensive than organic produce from family farms in the Rio Grande Valley.

    In our current system, economic decisions that save individual consumers money in the short term actually cost everyone more in the long run, by harming the environment and human health. Is this sound economics, or good common sense? How can we turn this around?

    Many economists believe that reducing or eliminating payroll and income taxes, and replacing them with taxes on waste, pollution, and resource depletion, would foster innovation, create far more and better paying jobs, fight poverty, and increase overall prosperity and quality of life, while reducing pollution and global warming.

    These tax structures could generate the public funding we need today, while gradually reducing the need for future public funding. For example, cigarette taxes could be set so that they cover the true cost of smoking-related health costs, which would in turn financially discourage cigarette use and reduce future health costs.

    The Task Force recommends we consider a future of higher employment, higher personal incomes, more jobs from innovation and invention, cleaner air, soil, and water, and healthier citizens. The current tax system is likely working against this brighter future.

    Using Citizen Action and Other Methods to Build Economy, Clean Environment

    By Talli Nauman

    Author of "How to Balance Economic Development with Environmental Protection."

    If the Governor’s Task Force on Our Communities, Our Future considered the context of the headline "How to Balance Economic Development with Environmental Protection," I seriously doubt that it would disagree with the premise, as Vice Chairman Rob Dickson contends it does.

    The article, like the tax policy position that Dickson presents on behalf of the task force, addresses the need to take into account the value of our natural resource base to productive activities. Both Dickson and I are raising the issue of factoring it into the cost of doing business, rather than allowing special interests to exploit it and pass the costs on to the public.

    The article’s title reflects the thrust of this series of investigative reports by implying that some economic development projects are unbalanced and can cause an imbalance in the region’s ecosystem when they do not include nature in the equation, while others can help maintain the balance of nature because they anticipate ways of protecting it. So, the intent is not to convey an image of development on one side of a balance fulcrum and environment on the other. Rather, the meaning is that stakeholders can achieve well-balanced development when they give consideration to environment.

    Taxes are inarguably one form of establishing the worth of natural elements for their protection. Quite another form, mentioned in the article, is Conca’ac (Seri) Indian spiritual teaching to inspire sea turtle advocates in saving the endangered species from extinction by the black market. Also outlined in the article are innovative public and private sector instruments, such as trust land conservation easements, a community mutual savings-and-loan association for economic activities in a federal nature preserve, and fishing cooperatives achieving market share growth through international certification for sustainable practices. As these models demonstrate success, they help dispel the belief in the false dichotomy that environmental protection stands in the way of productivity. These mechanisms are being added to the standard arsenal of governance measures that society must continually improve, including endangered species legislation, clean water and air acts, environmental impact statements, public hearings, and taxation systems.

    The task force’s proactive stance on tax reform is a courageous one, since constituents are often skeptical of tackling this facet of the fiscal incentives portfolio. In the multi-ethnic, international border state of New Mexico, the task force is obliged to assimilate a wide variety of citizens’ viewpoints into a pluralistic agenda, ranging from issues as different as taxes and spirituality.

    The International Relations Center welcomes the task force efforts in this regard, as we promote citizen-based policy agendas making the United States a better global neighbor.

    One thing that you have yet to address in relation to the subject of the article is New Mexico’s role, given the transboundary character of the issues. In many ways, the northwest region of Mexico is a new frontier where tax and other regulations are not applied. New Mexico, of course, has no role in applying them. The question becomes: What policies will help citizens on both sides of the border consolidate the pressure for ensuring environmentally friendly projects?

    I hope you will continue to share your ideas in our forum, which we call "a think tank without walls." Over the next two months, as you read the rest of our ongoing series on sustainable development in the binational ecosystem of the Lower Colorado River and Gulf of California, I think you will see that its premise is precisely that prosperity is impossible without habitat conservation. I invite you to respond further, particularly regarding what the New Mexico state government can do for the public’s cross border cooperation to protect this shared land, water, and air trust.