What is a tax refund for?

A tax refund for manufacturers would help them to retain their leading position in the market of household electric appliances and employees to keep their jobs according to a proposal by CECED (Conseil Européen de la Construction d’Appareils Ménagèrs). Attention is focused on the market of household electric appliances by the necessity of saving water and energy and by that of maintaining the competitiveness of the industry. Though manufacturers have spent millions on promoting environment friendly models, consumers are only responding slowly. Replacement of obsolete household machinery would allow a radical reduction in the energy consumption of European countries. Some governments have already seen the light. A guideline has been accepted in the USA for granting a tax refund for manufacturers of environment friendly household appliances and similar measures are planned in China. Since consumers are reluctant to invest in new machines, while the older ones still function, they should be given incentives to do so. A tax refund for production would lead to long term market changes with obvious advantages for both manufacturers and consumers. Governments would be able to meet their obligations under the Kyoto agreement more easily, while government revenues would hardly be effected at all. Consumers would pay less for water and electricity, whereas manufacturers would be able to increase their sales and generate revenues for financing further innovation. According to manufacturers, a tax refund for them would be the most practical form of support, since the long term effects of attempts to grant refunds on the basis of consumer prices have been questionable.