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local tax shift

A local tax shift reduces sales tax on goods from nearby, and increases it on goods imported from elsewhere.

It encourages local food and local service economy, since such exchange is not subject to tax. Existing barter, gift, LETS and farmers market tax exemptions would be expanded into a comprehensive scheme.

Such taxes on imported goods would systematically make up for energy subsidy, transport subsidy, means of protection and export subsidy from exporting nations, effectively confiscating such subsidies, leaving consumers paying the full cost to import, inspect, ship, rail and truck the goods to the market. Overall energy use would decrease as consumers were strongly encouraged to "buy local".

Because it increases reliance on neighbours and social capital, a local tax shift is usually represented as a green tax shift and also as a rural development method. It also encourages food safety and moral purchasing. Accordingly, fair trade goods are very often proposed to be exempted from the higher import tariff.

Current GATT rules forbid a local tax shift as favouring local production for intangible reasons.