"The Get America Working! approach would work, in effect, by correcting a major price distortion. The current U.S. Internal Revenue Code taxes employment far more heavily than it does the use of natural resources. This distortion has grown progressively worse as payroll taxes have grown. Revising this distortion would increase employment, equity and overall economic vigor importantly. And it would do so by responding to market price signals, not through clumsy and expensive government interventions."
Win, Win, Win, Win, Win
Date:
Sun, 12/28/2008
Source:
The New York Times
Stressing the importance of setting price signals to spur innovation in a greener economy and wean Americans from foreign oil Friedman writes, “This is his best window of opportunity to impose a gas tax. And [President Obama] could make it painless: offset the gas tax by lowering payroll taxes. … But if Obama, like Bush, wills the ends and not the means — wills a green economy without the price signals needed to change consumer behavior and drive innovation — he will fail. The two most important rules about energy innovation are: 1) Price matters — when prices go up people change their habits. 2) You need a systemic approach.”
