If we consider the life cycle of any product, at least 30% of it is paid as some for of 'tax' to the government. The taxes are justified as the production of goods consumes some resources that are in public domain. The idea would be to balance the revenue from taxation with the costs that the government has to incur because of that industry / product. Of course there is some additional amount for general public expenditure.
The nature of costs have drastically changed. However the taxation has not. Water and air are much more dearer today than a few years ago. The taxation has to changed to reflect this. Some products that may seem to earn money for the government, may actually be a drain on the system. Cigarettes and alcohol are major tax revenue earners, at least in the Indian context. However, when this amount is compared to the money spent on subsidised public health care or the loss of human resources it may not amount to much.
If there is some product in a particular category that does not use up as much of the water and air resources, meaning it uses clean technologies, it must be taxed considerably lower. There could be a special subsidy for green products or an additional duty levied on polluting industries.
In the short run the subsidies may seem to 'cost' the government, but it the long run we may all be better off with cleaner products and technologies. But of course governments all over the world have their own ways. In this context taxing of India's first electric car "Reva" at par with other cars seems unjust.
http://www.sonyclassics.com/whokilledtheelectriccar/
Check the above link. Things are maybe not as straight and simple as they seem.
Ahh, but there is hope too, check the link below.
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/307933/1/.html
Happy weekend.
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