Al Gore has proposed scrapping the payroll tax that finances social security, and replacing it with a carbon tax. According to him, the revenues from taxation would remain the same, the difference is the individual would not be taxed for working, giving him a larger incentive to work, and the business would be taxed for polluting, giving it a larger incentive not to pollute.
In short, I think this is a fantastic idea. The fact that payrolls were taxed to finance benefits that the very people who were directly taxed were to receive I find ridiculous. Why not let them spend their money as they please? It is simply government paternalism. The environment, on the other hand, is an issue which needs decisive action. A direct tax on carbon emissions would give industry a higher incentive to explore other alternative fuel possibilities, and at the same time it would lower the tax burden on the workers.
Reducing the tax on employers would give employers more incentive to employ, as they have more money available to pay workers. So not only would scrapping the payroll tax lead workers to be more productive, it would lead more workers to be employed.
The fact that under Gore's plan, carbon emissions would be taxed will inevitably be reached with harsh opposition by business ineterests, especially the coal industry, as they will certainly be hurt by a tax on emissions. So be it. The threat to our environement is too great, and the burden on the employers and employed too overbearing, for the current system of social security financing to be continued.
Of course, everything could be better if the whole system was scrapped altogether, but that, unfortunately, is political suicide.