consumption-based tax

Heidi.A.Busse@Lawrence.edu
Fri, 06 Nov 1998 09:12:24 +0000

i need a better understanding of the "consumption-based tax" -- a friend
and i were discussing the recent elections, and he (a quasi-democrat)
mentioned that he would vote for a republican if s/he supported a
consumption tax. I furrowed my eyebrows at my friend and queried
"consumption tax . . . what is that?" He vaguely responded that it is
"a tax on the amount of goods an individual consumes. I would like to
see this replace the income tax because I think that it would give
people more control over their money, force people to evaluate and
probably reduce the goods that they consume, and not penalize people for
working, but reward environmentally-responsible consumers."

Is this accurate? Are there any politicians promoting this tax (or AT
LEAST discussing it)? Are there any countries that implement a
consumption tax? Is it a feasible alternative? My friend mentioned
that there has been (by whom? i don't know) discussion about the
consumption tax, and that its opponents fear what would happen to the
economy the few months before it is implemented, because they expect a
surge in spending . . . any thoughts on this?

I'll toss out something else that he mentioned . . . (sorry i keep
jumping around) . . . jeff (oh, that's my friend) thought that this
might be an option for companies with reduced sales after the
consumption would be implemented: a greater promotion for investments
in companies (how would this work? i don't know because i possess an
anthill of knowledge regarding the economy . . . ).

How would a consumption tax affect salaries? minimum wage? How would
it affect international trade? local businesses?

I'm really curious about this idea and i suspect that there are others
who already have discussed the consumption tax. If so, please let me
know your thoughts.

heidi
Heidi.A.Busse@Lawrence.edu

On Fri, 02 Oct 1998 14:25:19 -0400 (EDT) san@nal.usda.gov (Andy Clark,
SAN Coordinator) wrote:

>
>---------- Forwarded message ----------
>Date: Thu, 1 Oct 1998 14:51:06 -0400
>From: Tom Green <tagreen@compuserve.com>
>To: Andy Clark <san@nal.usda.gov>
>Subject: ACIC News
>
>
>***************************************************************
>Agricultural Conservation Innovation News
>September 28, 1998 Issue No. 2
>***************************************************************
>
>Produced and distributed bimonthly via e-mail by the Agricultural
>Conservation Innovation Center (ACIC), a private non-profit
>organization at
>2234 S. Hobson, Charleston, SC 29405-2413. 843-740-1325, 843-740-1331
>(fax), website <http://www.agconserv.com/>. For a free subscription or
>to
>unsubscribe, please e-mail your request to <tagreen@compuserve.com>.
>
>************
>Contents
>************
>
>I. Sponsoring organizations needed to speed innovations
>II. Excessive rainfall risk policy available
>III. Corn rootworm policy to accept recommended scouting protocols
>IV. Risk Journal: Risk aversion among crop consultants
>V. ACIC meeting schedule for 1998-1999
>VI. About ACIC
>
>***********************************************************************
>I. Sponsoring organizations needed to speed innovations
>
>Question: What's the fastest way to gain farmer adoption of new,
>conservation-enhancing techniques?
>
>Answer: Conduct risk-free demonstrations on farms in every county!
>
>Grower associations, Extension offices, Conservation Districts,
>agricultural input suppliers, crop consultants and other groups can now
>participate in a new program to speed adoption of innovations to
>benefit
>their members, constituents, customers and clients.
>
>Most farmers are reluctant to adopt new techniques even if the
>innovation
>has solid research behind it and promises to lower production costs and
>enhance conservation. It's only natural. How much of your annual salary
>would you bet on something new you had heard or read good things about,
>but
>had never experienced first hand?
>
>A new program developed by ACIC in collaboration with IGF Insurance
>Company
>can provide this first-hand experience without risk. The program
>provides
>for testing of innovative techniques on a portion of a farmer's acres.
>A
>low-cost insurance policy will reimburse the farmer for any yield
>shortfall
>between the innovative field and a comparable field. The comparable
>field
>must be managed in exactly the same manner as the innovative field,
>except
>for the innovative practice.
>
>This split-field approach has increased adoption of no-till in cotton
>fields, innovative disease management in apple orchards and IPM
>practices
>in tomato fields. Farmers have adopted these new innovations more
>rapidly
>because they saw the innovation practiced successfully on their own or
>neighboring farms.
>
>Sponsoring organizations will assist ACIC in clarifying the benefits
>and
>risks associated with an innovative practice, recruit farmer
>participants,
>ensure sufficient technical support and help adjust any claims.
>
>ACIC requests assistance from potential sponsor organizations to
>identify
>projects where insurance coverage would enhance farmer participation.
>If
>you are aware of a Best Management Practice (BMP) or Integrated Pest
>Management (IPM) innovation that might benefit from risk-free
>demonstration
>on farmer acreage, or for more information, contact Jim Quinton, ACIC,
>2234
>S. Hobson, Charleston SC 29405. 843-740-1325, 843-740-1331 (fax),
><Jim.Quinton@agconserv.com> (e-mail).
>
>***********************************************
>II. Excessive rainfall risk policy available
>
>Applying nitrogen to field crops in two separate applications reduces
>runoff and leaching and increases yields in most years. The savings in
>input costs can be as high as 40% over single nitrogen applications.
>
>Why aren't all farmers using this technique? In some years, excessive
>rainfall during late spring can prevent farmers from making the second
>application of nitrogen, resulting in depressed yields. Farmers are
>understandably reluctant to take that risk.
>
>Next season for the first time, farmers will be able to purchase an
>insurance policy to reimburse them for losses suffered due to excessive
>and
>untimely rainfall. The policy was developed by ACIC and will be offered
>through American Agrisurance in several states, subject to state
>regulatory
>approval.
>
>The policy can also benefit farmers using a post-emergent herbicide
>strategy as an alternative to atrazine. For more information, contact
>Tom
>Buman, Agren, 312 W. 3rd St., Carroll, IA 51401. 712-792-6248,
>712-792-6175
>(fax), tbagren@netins.net (e-mail).
>
>***********************************************************************
>****
>***
>III. Corn rootworm policy to accept recommended scouting protocols
>
>A new insurance policy is close to completion that will insure growers
>who
>follow a crop consultant's advice not to treat for corn rootworm in
>corn-on-corn rotations. This policy, expected to be available in
>several
>corn belt states in 1999 subject to state regulatory approval, removes
>the
>risk that the consultant's recommendation may be wrong, resulting in
>unacceptable rootworm damage.
>
>Typically, crop consultants perform a sampling routine for corn
>rootworm
>beetles in late July to early August. Based on these sampling results,
>the
>consultant will advise the farmer if a soil insecticide treatment is
>justified for rootworm larvae the following spring.
>
>Farmers who have had their fields scouted for rootworm beetles by
>qualified
>crop consultants using recommended scouting protocols will be eligible
>to
>purchase the policy when it becomes available.
>
>For more information, contact Tom Buman, Agren, 312 W. 3rd St.,
>Carroll, IA
>51401. 712-792-6248, 712-792-6175 (fax), tbagren@netins.net (e-mail).
>
>******************************************************************
>IV. Risk Journal: Risk aversion among crop consultants
>
>Crop consultants have a tough job. They do it well, as evidenced by a
>survey conducted by Iowa State University indicating that 74% of
>farmers
>report a $2 to $5 return on every dollar they spend for crop consulting
>services (see http://www.ipm.iastate.edu/ipm/ncr/info/survey.html for
>survey results).
>
>On the other hand, crop consultants suffer from the same aversion to
>risk
>that afflicts farmers, according to a new book edited by Steven A.
>Wolf:
>
>"Farm advisors have an incentive to err on the side of caution, meaning
>interpret pest treatment thresholds with an eye on minimizing exposure
>to
>blame. As one consultant expressed, 'It is easier to prove you should
>have
>sprayed than you did not need to spray.' Farmers, Extension, dealers
>and
>independent crop consultants expressed that there are incentives to
>apply
>inputs when the data informing such a decision are inconclusive or open
>to
>interpretation. Managing a crop to maximize a farmer's net income is
>far
>more risky for a consultant than is managing for maximum yield and
>highest
>quality. Recommendation of an additional fertilizer or pesticide
>application is preferred by consultants to risking crop yield and/or
>quality loss. This form of bias stems from consultant's interest in
>insuring their reputation, their most important asset."(Privatization
>of
>Information and Agricultural Industrialization. S.A. Wolf, ed. CRC
>Press
>LLC, Boca Raton, FL, page 177.)
>
>Affordable "errors and omissions" insurance is not available to protect
>crop consultants and farmers from the consequences of faulty advice,
>hence
>the risk averse strategy. Many IPM and BMP techniques to minimize
>inputs
>carry a small but very real risk of failure. If a crop consultant knows
>that 1 out of 100 recommendations for a specific input reduction
>strategy
>will be wrong due to this inherent error, it makes sense to err on the
>side
>of extra inputs whenever the decision is not clear cut.
>
>Comprehensive and affordable insurance for crop consultants, covering
>all
>possible failed recommendations, is not likely to be available in the
>near
>future. The "single peril" approach pioneered by ACIC is a good
>stop-gap
>measure for consultants. For example, the policy in development for
>corn
>rootworm (see III. above) will reduce the impact on farmers and
>consultants of a failed recommendation not to treat for corn rootworm
>larvae.
>
>Crop consultants: Is there a recommendation you make frequently that
>might
>be made less risky by a low-cost insurance policy? If so, or for more
>information, contact Tom Green, IPM Works, representing ACIC at 2322
>Keyes
>Ave., Madison, WI 53711. 608-255-9443, 608-255-9469 (fax),
><tagreen@compuserve.com> (e-mail).
>
>
>************************
>V. ACIC Meeting Schedule
>
>ACIC representatives will be attending the following events. If you
>would
>like to arrange a meeting to coincide with any of these dates, please
>contact Megan Terebus of ACIC at 843-740-1325, 843-740-1331 (fax) or
><Megan.Terebus@agconserv.com> (e-mail).
>
>Oct. 18-21 Joint American Society of Agronomy, Soil Science
>Society of
>America and Crop Science Society of America Annual Meeting, Baltimore,
>MD.
>
>Nov. 8-12, 1998 Joint Entomological Society of America and American
>Phytopathological Society Annual Meeting, Las Vegas NV.
>
>Jan. 10-14, 1999 American Farm Bureau Federation Annual
>Conference,
>Albuquerque, NM
>
>Jan. 18-20, 1998 Wisconsin Fertilizer, Aglime and Pest
>Management
>Meeting, Middleton, WI
>
>Jan. 20-21, 1999 Maine Potato Conference, Presque Isle, ME.
>
>Jan. 20-24, 1999 National Alliance of Independent Crop
>Consultants
>Annual Meeting, Nashville, TN.
>
>Jan. 31 - Feb. 4,1999 National Association of Conservation Districts
>Annual Meeting, San Diego, CA.
>
>Feb. 6-8, 1999 United Fresh Fruit and Vegetable Association Convention
>and
>Exposition, San Diego, CA.
>
>Feb. 8-10, 1999 New York State Vegetable Growers Association Annual
>Meeting, Syracuse, NY.
>
>Feb. 18-20, 1999 Commodity Classic, Albuquerque, NM
>
>Mar. 28-31, 1999 North Central Branch Entomological Society of
>America Annual Meeting, Des Moines, IA.
>
>
>******************
>VI. About ACIC
>
>ACIC is a private, non-profit organization working to develop new tools
>to
>make conservation objectives affordable and attractive to the
>agricultural
>community. Initiatives of the center include risk-reducing insurance
>policies for conservation-enhancing management practices, tax
>incentives
>for wetlands preservation and mitigation, and innovative "trusts" and
>"savings accounts" in support of wetland and grazing land conservation.
>
>ACIC is actively seeking additional opportunities for IPM and BMP
>insurance
>policies. Please contact ACIC for further details.
>
>
>******************************
>Thomas A. Green, Ph.D.
>IPM Works
>2322 Keyes Ave.
>Madison, WI 53711
>608 255-9443
>608 255-9469 (fax)
>tagreen@compuserve.com
>
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