evolutionary economics

I love markets. Capitalism is great. It's only problem is that the price of goods and services do not include all of the costs. Not that this is news. The price of potato chips doesn't include the cost of atherosclerosis treatment for some percentage of the consumers.

But it's impossible to figure out the true cost of everything.

So here's the solution.

First, you abolish income tax. But goods and services have heightened sales tax that reflect their costs.

You set up a government agency, supplemented heavily with industry, academic and public expertise, which evaluates costs. We start with what we do know, which isn't very much. But we know the approximate cost of road maintenance associated with driving a car ten miles down the road. So we should build that cost into gasoline pricing. The government agency is responsible for making recommendations. You sum up all of these things we know, and you factor them into sales taxes for associated costs and services.

As soon as scientific studies demonstrate additional cost associations (to the satisfaction of the government agency and its varying committees), you factor that into the sales tax (further research might even suggest that a sales tax should be lowered, especially if new technology comes along that lowers its costs).

Finally, you allow people to make decisions about what's important to them with their own pocketbook. Some underlying sales tax would be the same for all products, to support things like education, police and fire protection, military, etc., which aren't directly tied to any given class of products or services. But the rest of the sales tax would vary depending on the product or service and its societal cost.

This sets up an evolutionary scenario. Mandated sales tax changes give consumers a chance to modify their behavior if they so choose, and allows companies to come up with innovations that would lower the product's cost and its market place.