The net effect of this tax will be as follows:
1. Marginal producers will be bankrupted. These will be primarily family operations.
2. Corporations, taking advantage of economies of scale will buy up the loose herds and expand production for a net increase in methane production.
3. Based upon economic analyses, the tax will be increased to fight the increasing "sheep fart" crisis. More marginal producers will fail and some of these will be corporations.
4. Kiwi populist politicians will begin running on "saving the family sheep station" and the electorate will not recognize that politicians created the problem in the first place.
5. Parliament will vote substantial subsidies for wool and mutton production. An early guess is that the subsidies will be approxiately ten times the amount (50 million NZ) of the original tax.
6. Eventually the tax on wool and mutton will be so onerous that other countries will become competitive with the NZ industries and you will then see larger corporations begin to experience difficulty. 7. Sheep will then be farmed like chickens in hermetically sealed barns with automatic feeders, and methane scrubbers. There will be the occasional explosion when the scrubbers fail to work correctly. PETA will then launch an ad campaign touting the plight of the New Zealand "slave sheep". 8. At any time in this process, if another country decides to get into sheep production, NZ's industries get cooked, as the government will not be willing to reduce the taxes make this production competitive on a world wide basis. 9. As sheep production falls, the government will increase taxes to make up for any shortfalls from this profit center, thereby eliminating any ability to compete in the world market.
Sound familiar?