Companies, large and small, should be taxed on the basis of harm caused. Let’s consider how this could work in practice, looking at various industries; starting with the gambling sector.
As a sector it turns over around £15bn a year, as of 2019. It spends around £1.5bn a year on marketing, generating an approximate ROI of 10/1. As a sector, it offers a service that is for some, addictive and highly destructive.
For others it’s entertainment, and a way of heightening the experience of sporting events. For many, it’s a carrot on a stick, a hollow and empty hope that hangs on the spin of an online wheel designed to extract thousands of pounds from millions of people and into the hands of a tiny few. Denise Coates, the chief executive of Bet365 paid herself a salary of £422m in 2020. Plus dividends.
Meanwhile, around 422,000 people are considered to have a problem with gambling, and 500 a year are driven to suicide by it. Imagine creating a system that wreaks that sort of havoc on lives, then extracting as much money from it as possible. It’s a similar mentality to narco barons. But I’m not here to judge. So, meanwhile, a report from Gamble Aware states the cost to the Government, ie taxpayers, is between £260m and £1.2bn, much of it from the NHS.
There’s also the human cost of destroyed lives, anguished families, domestic violence triggered by the stress, and of course, hundreds of suicides. But again, who am I to judge. So let’s think about how we could be useful and imagine a way of offsetting the harm caused by rapacious greed and industrial scale exploitation of human weaknesses. Because gambling is far from the only sector causing harm, as well as providing legal entertainment, services, or products.
The alcohol sector, the tobacco sector, the sugary drinks sector, the social media platforms, the automotive sector, every sector, pretty much, does good and harm. My point is this; a taxation system based on the good and harm ratio would change the direction of innovation of commercial progress. Companies should be taxed on the basis of the costs they incur to society.
Sectors causing higher levels of harm should be taxed accordingly. This creates a tax incentive to cause less harm. If businesses were assessed on harm caused, they could be taxed a ‘harm tax’. This could then be used to offset that harm.
So the tax generated from online gambling could be used to fund gambling addiction clinics. In the simplest expression of this idea, rather than a single person paying themselves £422m plus dividends, £400m could have been used to prevent the suicide of hundreds of people.
A harm tax would create an incentive for companies to reduce the harm they generate, and would fund the restorative services required to offset that harm. It’s a circular model, incentivising the creation and funding of businesses that heal, and disincentivising the ones that harm. Tax harm, and use it to heal the harm done. The tax on plastic could fund the clean-up of it, and incentivise viable alternatives.
Simple idea. It would change the world.