I watched Al Gore on Larry King on Saturday (a rerun of Tuesdays show). He seemed to do great up until he said this: "I think we ought to eliminate the taxes on employment, the payroll taxes that discourage jobs and make it up dollar for dollar -- no tax increase, revenue neutral. Eliminate the payroll tax and make it up dollar for dollar with pollution taxes, principally C02 taxes and, yes, that would raise the price of gasoline but it would come back to the American people in the form of sharply reduced taxes on payrolls. And for those places where there was a difficult adjustment, make special provisions there because you would have the money to do it." That means eliminate all social security and medicare taxes, as well as all federal income tax, and replace it with pollution taxes. Wow. So, has he gone off the deep end? I don't know. But I was thinking about this proposal, and I think it is at the very least an interesting proposal. The pollution taxes could be levied on all imports as well, and so goods from China manufactured in terrible conditions with very dirty coal energy would cost more, and we probably wouldn't buy them. This would cause severe pain for the Chinese economy, and probably force them to clean up their act. American manufacturers would have to get a lot cleaner, and there would be strong market incentives to do so, therefore enabling a rapid transition to a green economy with green energy. So it would do what is necessary to fix things, at least as far as I can see. But it would take a lot of tax burden off the wealthy and shove it on the middle class. Probably not the poor because the minimum wage could easily be set as a "living wage", i.e. the amount it would take a family of four to be at poverty level, which would be defined as the amount of money required to meet basic needs, and since costs of goods would increase, the poverty level would rise, and thus so would the minimum wage. So poor people wouldn't be hurt much. But the middle class would now take the brunt of the tax burden, while the rich would have little tax burden at all. So what do you think? Is it even workable? Might the problem of redistributed tax burden be fixed with wealth and capital gains taxes? I don't know, but it is at the very least interesting. Let the raucous debate begin!