Another Approach to Regressive Taxation and Regulation

For those keeping up with the news and interested in a fresh economic prospective to reducing dependance on foriegn oil here is an idea. Government bounties for technological innovation. The private sector has already began exploration with the Branson X-prize for fuel efficient Jet liners, and most recently the 10 million dollar bounty offered by an insurance company for a fuel efficient car getting at least 100 miles per gallon that is both marketable and safe. In fact, the annoucements of the prize has already induced 8 teams to compete with more sure to follow.

The idea of bounties to spur technological innovation is no unheard of. When the British Empire was looking for a way to measure longitude for their ships in the 1700's the Parliment established a bounty for anyone interested. Sure enough, the current measuring system we use today was soon developed.

Perhaps the real question is why we have politicians encouraging regressive taxes including taxes on fuel among other resources used in production. A tax on gasoline only hurts those that already have trouble affording fuel. As I already discussed, the idea of a carbon tax would only serve to limit economic growth and punish those in low income brackets. However, the solution of a government imposed prize for technological innovation would not handicap those groups of people. In fact, the economy would experience no real change from tax pressures. Additionally, there might even be extrinsic benefits as companies interested in the bounty employ workers and scientists to help. Investors might be more willing to invest.

Finally, there is also the argument that mistakes are the mother of invention. For those companies that fail to win the grand prize, I most certainly guarentee they will have established some marketable technology along the way. Marketing the "mistakes" would only serve to enhance the company bottom line and thereby increase profits and investor confidence.

I feel that these government sponsered prizes would work the more I read about them. We should impose regressive taxes that handicap the economy and injure poor American. We should use the many we have to create jobs and better technology.

-I would like to thanks Joseph Adler, whose views helped inspire this posting. The full article of his views can be viewed here.