The Elephant in the room: Our post-war tax system

Imagine it’s 1997, in a small town in the Czech Republic. An 11-year-old girl sits in a class called “National Studies.” The topic that day is the National Theatre building in Prague – specifically, its golden roof. A pupil asks a question that, unknowingly, would change everything for this young girl:

“If the roof is made out of gold, why does no one steal it?”

The teacher pauses, then responds:

“Because they’d be stealing from all of us. The gold represents our shared greater good – our culture, our architecture. If someone stole it, we’d all be worse off.”

The gong signals the end of the lecture. Students get up and move to the next class – Biology. The topic: the functionality of trees. For this 11-year-old, forests, too, now symbolize a greater good. They make the air cleaner; they serve everyone.

This idea – that shared resources benefit everyone – sits deep within her. Perhaps it was still the lingering mindset of a society only a few years out from the fall of the Iron Curtain, when notions of collective ownership were common. Regardless, it planted a seed that would continue growing as she tried to make sense of how our world is organized.

Fast forward to 2006. The same girl is now 19, studying at the Vocational College of Fashion. Learning about production processes, accounting, and the basics of economics, she begins to wonder: How and why do societies tolerate companies privatizing profits while externalizing irreparable damage onto the world’s population?

By 2012, she hands in her master’s thesis on the 5Rs of sustainable consumption: reduce, reuse, repair, recycle, redistribute. Yet even then, it was clear – these concepts, while noble, had little space in the current capitalist structure dominated by linear “take-make-waste” models.

So she moves on. She begins working, like everyone else.

With the rise of social media, she – and many others – start to learn about the ugly truths of globalization and unchecked capitalism. Protests, grassroots movements, and worker advocacy efforts rise up. Still, in Western countries, life remains relatively comfortable, and imagining an alternative remains difficult.

Moreover, it’s all so complex. How does one person change a system designed over centuries to reward the few at the expense of the many?

(And to be clear: it isn’t a simple “left vs. right” political issue, even if party lines sometimes make it appear that way.)

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Then, in 2022, a new innovation appears quietly: ChatGPT.

By 2025, it becomes obvious that this “little” invention is transforming everything.

The economy is in disarray. Traditional careers crumble. Productivity skyrockets, but prosperity doesn’t trickle down. Fear arises.

And the little girl – now a grown woman – still wonders why no politician addresses the elephant in the room:

Why are we still taxing labor and consumption, instead of resource extraction and pollution?

If we are serious about transitioning to a circular economy – an economy where waste and pollution are designed out from the start – we must stop rewarding extraction and start incentivizing circular solutions.

Consider plastics:

• Virgin fossil-based plastics are cheap.

• Recycled plastics are expensive and often lower in quality.

• Companies, legally bound to prioritize shareholder returns, have little reason to shift toward expensive, sustainable practices beyond making it appear they care. (Corporate social responsibility, in this context, often remains toothless.)

Governments must redesign tax systems to encourage circularity, turning sustainability from idealistic aspiration into practical, profitable reality.

Some possible policy tools could include:

• A Virgin Plastics Tax

• Plastic Recycling VAT Discounts

• Recyclability Tax Credits

There are some pilot efforts globally (like carbon pricing and waste charges), but the scale is insufficient. We need systemic change, not piecemeal reforms.

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Meanwhile, AI exponentially boosts productivity.

Yet political discourse – especially in many right-leaning parties obsessed with “full employment” – remains fixated on a 20th-century idea of work, without addressing how hyper-productivity requires fewer people in traditional roles.

The capitalist model, under current tax structures, accelerates wealth concentration at lightning speed: billionaires gain more while middle- and working-class citizens grow poorer and disillusioned.

This trend is widely documented – not just activist rhetoric – but it remains politically explosive and thus often ignored by leaders with 4- or 5-year electoral mandates.

If we shifted the tax base – stopped taxing labor and started taxing resource depletion and pollution – we could:

• Normalize a 3–4 day workweek without cutting wages (by redistributing productivity gains).

• Make it economically rational for companies to embrace true circular business models.

• Discourage destructive extraction.

• Finally, hold polluters financially accountable.

Of course, this transition wouldn’t be without challenges. A careful, phased approach would be needed to avoid economic shocks and safeguard vulnerable industries and workers. But it is possible – with courage, leadership, and planning.

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The truth is: Billionaires, corporations, and industries most responsible for environmental damage could be reined in if governments stopped shying away from systemic change.

But so far, most politicians prefer minor adjustments over radical solutions.

So: let’s organize. Let’s push for tax reform. Let’s demand that the real costs of environmental damage are paid by those who cause them.

I’ve spent 28 years wondering why no one addresses this.

It’s time we did.