Imagine a tax that fights environmental pollution and unemployment at the same time. A real win-win tax, in other words, that causes hardly any pain because the money is returned to the taxpayers. Too good to be true? Not so, thought Hans Christoph Binswanger, an economics professor at the renowned Swiss university of St Gallen. Some 25 years ago he developed the idea of an ecological tax reform that is revenue-neutral but would still have the effect of steering the economy away from an energy-intensive and therefore unsustainable path.
The idea is simple enough: levy a tax on energy and use the proceeds to slash social security contributions. ‘Labour must be made cheaper without lowering wages,’ Binswanger demanded in an interview with the German paper Die Tageszeitung. A tax set up in such a way solves several problems at once, he said.
