Friday, December 5, 2008

Taxing smelly animals

Too much cow gas? Tax it!

Here's the story from YahooNews.

An efficient policy that made me laugh ... its win-win!

Thanks Whitney!

Notice the expected opposition from the farmers. "We'll go out of business" (if we have to pay the real costs of production).

4 comments:

Anonymous said...

from matthew pickett,
THis type of taxation seemingly would internalize some of the external costs, right. Why in the hell are the farmers freaking out so much. They'll just charge more for the meat. And if they think that will drive consumers overseas we could just tax them to. That way all the granola crunchers could be happy because they are getting the mediation they want( and is rightful) while not outsourcing even more 'american made' products. This would definitely hit close to home as the eastern north carolina hog farming industry would take a hit. However they have all but been bought out by murphy farms and smithfields anyway so it doesn't seem that tom and evelyn hog farmer will likely feel a hit anyway.

BrandonHedrick said...

Currently, the U.S. livestock markets are struggling anyway. We can all argue that this would be a good thing environmentally-speaking.

The fee is outrageous compared to the profit margins of livestock. The profit margins on feeder cattle are almost always close to $100 per head, so in essence profits would be wiped out. The lowering of feed costs may help some with this, but in the current economic times, Americans are not going to pay more for beef. The buying power for the American consumer has already decreased; therefore, decreasing demand for meat.

On top of the pricing argument, farming is romanticized by most rural areas. This would definitely get senate attention from senators in Texas, Wyoming, Colorado, Nebraska, and others. Let’s face it, if it wins votes to not tax farming, farming will not be taxed. In fact, it will probably be subsidized……..oh wait, it already is.

Brad Coffey said...

The fellow from Alabama that believes there's an ulterior motive sort of shocks me. It sounds like he is speculating conspiracy on groups that come up with these ideas to end the whole "animal cruelty" crime that farmers are committing. I seriously doubt animal rights activists are exploiting economic theory to accomplish their own means. It makes perfect sense to tax something that creates a negative externality, but if the result is far too negative to the industry, maybe start small at first by removing any subsidies. That would shift the cost curve at least somewhat closer to marginal social cost.

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