"Subsidy Footprint"

Here's a new topic for Mankiw to ponder: Screw the "carbon footprint" nonsense (on the basis of Global Warming cum Climate Change being no more than a massive swindle - sorry TG, I'm still not convinced) and focus on the principle of subsidy inflows and outflows, for individuals and corporations.

A Bangladeshi blogger talked about it last July as 'Subsidy-neutral lifestyles and businesses.' He's got a good start but some of his underlying ideas are crap. (Such as "... some part of that fuel price is being paid by those poor kids ...") But he captures the essential idea in his closing paragraphs:

There is also another dimension. In many capital markets of the world, there are separate indexes that include only companies that fulfill certain kind of benchmark. For example, an investor who is looking for Sharia complaint investment, there is an index in NYSE that helps you do that. If you are looking for companies who are environmentally responsible (i.e. green), there are many services available to help with that.

In line with this, in Bangladesh, some civil society or NGO organiation should offer a service to identify the amount of money that different business houses are getting as government subsidy, they get it through different generalized subsidy mechanisms of the government (e.g. fuel subsidy, electricity subsidy, water subsidy, etc) even though the business might not need it. Once that information is public, the individual companies can try to become subsidy-neutral. Once they become subsidy-neutral, only the amounts above that should be treated as tax-deductible CSR expense, if government wants to go that route.

Any takers for this initiative, to offer services to the individuals and to the businesses, so that they can become subsidy-neutral if they want to?

But this omits the other half of the subsidy-balance equation: How much did each business/individual pay in taxes, fees, regulatory compliance costs, etcetera, etcetera?

Let all the peoples of the world see an objective calculation of this balance - for individuals, for corporations, for governments. Then and only then can we engage in a conversation about "fairness."

Economics and Markets Posted by JohnGalt at March 18, 2009 12:34 PM