If we would decide to tax raw materials instead of labour and income, repair would make economic sense again. Raw material usage is not sustainable as the resources are finite. Labour on the other hand is very sustainable, given enough time the supply of labour is infinite and usage of labour is sustainable. What we tax and what not is not a given, but something that can and should be revised to gnudge the world into better shape. Even though I greatly sympasize with the right to repair, as long as it is uneconomical to do repairs due to incentives (taxation) making it so, we are not really addressing the root cause and one could argue that this repair day is distracting attention from the real issues
Taxing material use and refunding at material recovery is not totally unreasonable, but it ignores the energy that goes into both processing steps and the people required to do labor. Repair is totally compatible with this, since it reduces waste of all of material, energy, and labor. It’s also something consumers can readily participate in and influence, unlike tax policy.
Taxing energy also works as a proxy for taxing material - you need energy (lots of it) to mine and process raw materials, so I'd expect taxing energy use to shift the market activity towards services and reuse of already processed materials and manufactured goods.
There is plenty of energy available from the sun in one way or the other, and there is no inherent harm in utilising that. So in my ideal tax system only finite resources should be taxed, primarily land usage (including use for agriculture, and somehow based on demand) and raw materials (including oil, coal etc). Things like labour, "value added", energy use and co2 emissions would be exempt. Imagine hiring an expert to do repairs would cost about the same per hour as you can make after taxes. In North West Europe a plumber or painter typically costs you about twice what a programmer makes after taxes in the same time. Because of 50% tax on income + 20%VAT. So even if you are not so great at DIY it is (or seems) very often much cheaper to kludge it yourself that to hire an expert expert to do it for you. What a waste
> reduces waste of all of material, energy, and labor
Not necessarily. How much labor goes into one smartphone or other mass-produced thing? I suspect in many cases the incremental labor required to make another one is minimal compared to the significant effort required for one-off repairs.
Taxing raw materials instead of labor would incentivize more sustainable practices, but the unintended consequence is that it would disproportionately affect people lower in societies social hierarchy.
If you are a truck driver or construction contractor (blue collar) your productivity depends on resource consumption. Whereas if you are in finance or software (white collar), your productivity will not be affected by your consumption, aside from the purchase of a new computer every few years.
We would be giving up our progressive tax system. If you tried to keep elements of a progressive tax system, the rich would shift their consumption to the poor who would be taxed less for raw material consumption and we’d have very similar incentives to today, though with more wealth shifting to the poor. You could do a rebate program, where people with lower incomes get paid back the money they would have made without the tax system, but now we’re talking about setting up a bureaucracy to do means testing on significant proportions of the population, who would be least likely to take advantage of tax loopholes.
I’m trying to think of ways to keep this idea from being a regressive tax, but I’m failing. Anyone have wisdom?
Because of the cost of labour a lot of effort has been put into minimizing labour at the cost of capital (resources, automation etc). This again puts a negative pressure on wages as one would otherwise be automated away. By making labour cheaper there is less incentive to minimize labour at the cost of resource use (e.g. disposable products vs reusable ones that need maintenance). More demand for labour should increase wages for lower skilled labour. Less people would "drop out of the ratrace" so to say, as there is more demand for them. There is already implicit recognition for this in Europe. In the Netherlands it is very acceptable (albeit illegal) to not pay taxes for a cleaning lady. In Belgium there is asystem where everyone can get a few hours of subsidised household a week that negates the tax pressure, etc. But instead of all these small adjustments to make the tax system workable I would love there to be a wider debate on what the grounds for taxation should be. In my proposal you get taxed for what you consume in resources and land use, regardless what you use it for. I think that would be a pretty fair premise to start with, and perhaps a few exemptions are needed to make it work.
What you argue for actually is the case now. Repair labor is not taxed. In the USA, no services are taxed at all, which is itself a problem for discussion.
However, there are sales taxes that tax purchases of material goods.
I think we need higher sales taxes with rebates for taxes paid up to $20-30k per year to eliminate the burden on the overtaxed, plus add services taxes to doctors, lawyers, accountants, even programmers.
