Taxpayers Dollars Subsidizing Destruction

Taxpayers Dollars Subsidizing Destruction. One way to correct market failures is tax shifting—raising taxes on activities that harm the environment so that their prices begin to reflect their true cost and offsetting this with a reduction in income taxes. A complementary way to achieve this goal is subsidy shifting. Each year the world’s taxpayers provide at least $700 billion in subsidies for environmentally destructive activities, such as fossil fuel burning, overpumping aquifers, clearcutting forests, and overfishing. As the Earth Council study Subsidizing Unsustainable Development observes, “There’s something unbelievable about the world spending hundreds of billions of dollars annually to subsidize its own destruction.”