Tuesday, August 15, 2006

Aquifers

Most people know that I advocate a tax on pollution. The primary rationale for such a tax is that it would create a cost basis for the externalties of polluting the environment. In a similar vein, I also advocate a tax on water. Fresh water is not an illimitable resource, and the draining of aquifers does have undesirable externalities. By taxing water based on its relative scarcity, heavily in desert areas like Nevada, lightly in sodden areas like Wisconsin, the price of water would more accurately represent the true cost of water.

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