Social Cost: The Magic Bullet of Social Policy & Tax Reform
The Savings, Efficiencies & Fairness of a Social Cost Based Tax System Called ROOPA:
Responsibility for One’s Own Products & Actions
ROOPA is the tax program you’ve been waiting for. ROOPA can cut taxes by half while still doubling benefits and programs.
ROOPA’s secret is simple. ROOPA works from a social cost based approach to develop new found economic policy platforms. “Social costs” are all the expenses associated with a particular product or activity.
The social cost of drinking, for example, would be cirrhosis of the liver, spousal abuse, drunk driving and all the additional expenses for extra cops, courts, hospitals and prisons required to deal with America’s DUIs (Driving Under the Influence of alcohol). In this book, we show the methods for identifying such social costs and then demonstrate how this data lends itself into specific policy proposals.
Working from a social cost based model allows ROOPA to quantify our policies into something that is more a measurable science then the political traditions, guess work, or cultural preference now used to form much of our public policy. With ROOPA, you need only follow the cost associated with each step of a product or action to pinpoint the exact spot of greatest cost. Intervene at these points of greatest impact and you beget both the greatest savings and by default, the most effective policy response.
This social cost based system was discovered in my rally against the tobacco industry of a decade ago. This rally grew into a religious cause against all vices as described in Section I. (This effort culminated into the first book, ROOPA: Part I, which covers the cultural and religious context of vice throughout history. The economic review here was originally part of this first book, but grew into a book of its own. We therefore call this book here Part II. ROOPA Part I is nearly complete as well.)
It was in looking at the combined cost of all vices that I saw the extraordinary potential of this approach. It was from this perspective that I discovered the next two components of the ROOPA process. The first was coming to recognize the social cost basis of this ROOPA method. The second was uncovered in working with my Economist, John Dunham. John helped to clarify that we could now take hundreds of billions of dollars and transfer them out of American’s tax bill. He did this by helping to formulate ways this could be done as specific tax policies.
It took some time before it dawned upon me that the actual rationale of ROOPA was found in tracing an activity to its social cost rather than to the religious cause against vice that inspired this journey. All the political branding we use for things like vice (or today’s next hot issue of global warming and its corresponding carbon tax) generally hide the social cost basis of these causes. Once I realized this secret, I began applying this social cost method to every political or policy issue I came across. I was amazed at this methods effectiveness to upgrade the budgeting and service performance while still offering generous tax and regulatory relief. Lying in the wings stands a series of reforms for everything from Social Security to the Sub-Prime Mortgage melt down, to FEMA, immigration and American energy policy. In each case, ROOPA’s social cost base methods prove dramatically more proficient then anything we have today. This book begins with vice, but vice is just one of the many categories of policy reforms that this social cost based system can be applied to. I have now spent years playing with these other issues using this social cost based system. We will introduce the policy reform considerations for them in the months and years to come.
For now, this book focuses on how ROOPA tailors reforms for the category of things branded under the heading of vice.
(Sorry, this web site still does not take charts. Hopefully, within a couple months or so.)
Lifestyle- From $112 billion (Low) Up To (a High of) $1.2 trillion a Year
Figure A1 (From Section II, Chapter 1)
We start with the category of vice for several reasons:
1) Vice is simply one of the most dramatic categories of social reform one can start with as a political cause. On the one side, religion holds vice up as the symbol of bad and evil while in its counterpart, vice is Hollywood’s glamorized trade mark for the rebel without a cause. This dueling mascot will stir public debate in a way few other things ever could. (Controversy is always great for book sales.)
2) Vice also offers one of the easiest products/activities to identify and follow along in its route of destruction over some of the more intricate issues like say television’s impact on violence.
3) The public is surprisingly well educated about the cost and harm of vice. This is due from the years of gov’t campaigns, community outreach programs, media reports and personal experience.
4) Vices are an optional lifestyle activity versus a basic necessity like other high social cost activities as energy consumption or travel. We don’t have to drink and smoke, but we do need to light our homes and go to work.
5) The disparities between a product’s social cost and the taxes charged provide a clear demonstration into the economic distortions caused by today’s tax policies. Taxes are often set at a much higher rate than the actual social cost (ex. cigarette taxes). In other cases, ‘special interest’ secure huge subsidy tax breaks for their industry. This artificially reduces their exposure to their own social costs (gaming and guns). In either case, the distortions are huge and ripple throughout the economy. We will now be able to better identify the impact of these distortions.
6) And the #1 reason: Vice provides the greatest tax and insurance savings of any other group of products or activities.
Depending upon the studies you choose, America’s combined estimated social cost of vices runs at between $100 billion to a whooping $1 trillion a year. (Figure A1) This cost runs anywhere between $1,000 to a high $10,000 a year in added taxes (and insurance) per American family.
ROOPA allows us to transfer out this entire sum from our general taxes and place it as an optional expense. Nothing else can offer us such a huge, ongoing, annual savings as those provided by vice. In short, Vice offers ROOPA an explosive discussion with a platform offering the biggest savings on something that is easy to identify and already known to the public. No other tax reform offers so much, to so many, so easily.
Next, we offer a summary on the ways and means in which we go about providing these new budgeting and tax reforms.
