The Story of Stuff

Congrats on finishing AP Micro! We've learned a lot of good economics so far. But it's not the whole picture...

The Story of Stuff reveals the connections between a huge number of environmental and social issues, and calls us together to create a more sustainable and just world. It'll teach you something, it'll make you laugh, and it just may change the way you look at all the stuff in your life forever.

Please watch this video and post your thoughtful comments. How does it present another side of microeconomics and the market? What bias or agenda does the presenter seem to have? Does she influence your own decisions about your consumption? What specific change might you make in your lifestyle in response to this video, if any?

A fart tax?!?!

Proposals to tax the flatulence of cows and other livestock have been denounced by farming groups in the Irish Republic and Denmark.

A cow tax of €13 per animal has been mooted in Ireland, while Denmark is discussing a levy as high as €80 per cow to offset the potential penalties each country faces from European Union legislation aimed at combating global warming.

The proposed levies are opposed vigorously by farming groups. The Irish Farmers' Association said that the cattle industry would move to South America to avoid EU taxes.

Livestock contribute 18 per cent of the greenhouse gases believed to cause global warming, according to the UN Food and Agriculture Organisation. The Danish Tax Commission estimates that a cow will emit four tonnes of methane a year in burps and flatulence, compared with 2.7 tonnes of carbon dioxide for an average car.

Agriculture, transport and housing are not included in the EU's Emissions Trading Scheme (ETS), which enables industrial companies to buy and sell permits to emit carbon dioxide. Instead, EU member states are obliged to cut the emissions from non-ETS sectors by 10 per cent overall by 2020.

While Romania and Bulgaria will be allowed to increase emissions, Ireland and Denmark are each faced with cuts of 20 per cent in farming sector emissions.

The cow tax proposals would raise funds to buy allowances from other member states or to invest in technology that might reduce emissions. Denmark is believed to be further advanced with housing for pigs that captures and stores methane emitted from the animals. The gas can be used as a fuel for power generation.

A spokesman for the European Commission said that a cow tax was not its preferred option. “We would rather have solutions that reduce emissions by capturing methane from manure and new animal feeds that reduce methane.”

What do you think about this tax? What might this tax accomplish? Think about the things we've studied in class, and write your comments below.

And check out this follow-up article on fish oil!

Are Obama's tax increases "fair"?

Here are two opinions by well-respected economists on the tax increases proposed by U.S. President Obama:

ROBERT D. REISCHAUER

President of the Urban Institute; former director of the Congressional Budget Office

Is "afflicting the comfortable," as John Kenneth Galbraith liked to quip, fair, economically sensible and practical? In this case, yes! Unlike average Americans, those on the income ladder's top rungs have enjoyed very healthy income gains over the past decade. And, even more than those lower down, they have profited handsomely from lowered effective tax rates. To make the education, health and environmental investments that our society and economy need for the long run, why shouldn't those who have reaped most from society's past investments bear most of the burden of seeding tomorrow's opportunities?

Some fear that increased taxes on the top 5 percent will wreak economic havoc -- crimping entrepreneurial spirits and stanching charitable giving. But the overwhelming body of economic evidence suggests these effects are small.

Over the longer run, as the nation grapples with its entitlement promises, educational needs and infrastructure deficiencies, Americans at all income levels will have to accept somewhat higher levels of taxation.

N. GREGORY MANKIW

Economics professor at Harvard University; chairman of the President's Council of Economic Advisers from 2003 to 2005

The best data on the distribution of the tax burden show that the tax code, including all federal taxes, is already highly progressive. In 2005, the most recent year for which numbers are available, a household in the [bottom 20%] paid 4.3 percent of its income in federal taxes and one in the [next 20%] paid 9.9 percent. A household in the top 1 percent of income distribution paid 31.2 percent of its income in taxes.

The tax rate that top income earners face is not historically anomalous. It was higher during the Clinton years but lower during the Reagan years. In contrast, the tax rates now faced by the [bottom 80%] are unusual by historical standards. They were higher from 1979...until the passage of the Bush tax cuts in 2001.

President Obama's proposal to raise taxes at the top to further cut taxes at the bottom has one rationale: using the coercive power of the state to "spread the wealth around." In addition to the obvious disincentive effects, the policy raises deep philosophical questions. If one citizen of a nation can lay claim to the wealth of his more productive neighbor, shouldn't poor nations have the right to lay claim to the resources of richer nations such as the United States?

What do you think? Whose opinion do you agree with more, and why? Refer to the things we're learning in class. Post your comments below, or respond to someone else's comments.