Tuesday, June 1, 2010

Gasoline Tax, Advocated by... Car and Driver?

That's right. Gearhead magazine Car and Driver ran a column in the July issue, written by Aaron Robinson, advocating a gasoline tax as a much more efficient way to enforce fuel standards than the current CAFE system. (Sorry, the column isn't online yet.)

Please, can't we even discuss a gasoline tax without somebody calling somebody an America-hating socialist?
Having a five-year lead time to plan a product that will live or die on the future spot price for crude makes the industry extremely risk-averse. Investing in cool, compact vehicles with small, high-efficiency gas and diesel engines--such as the gems that rule Europe's roads--requires some confidence that people will buy them.

A fuel tax would help instill that confidence without forcing down our throat the desperate, costly changes necessitated by CAFE.

Hey, if even gearheads are asking for a carbon tax, why not oblige them? Anyway, the worst gas-guzzlers are bought by rich people at this point anyway. The exception to that is work trucks. But isn't that gas already tax-deductible? We need to put a price on carbon and this is a spot where we would clearly get a large market-based reaction.

Or maybe I'm just more willing to entertain the idea since I have a Honda Fit that makes it out of the garage once a week or so.


  1. I'm for this, since, as you know, I'm in favor of targeted taxes that make people internalize the cost of their voluntary activities. However, even though gas guzzlers like SUVs are the toys of the affluent, a gas tax would still probably hit the poor disproportionately heavily, apart from those who take public transportation. The reduction in driving is therefore going to be distributed unevenly by income. Maybe that's still a good thing. But the inconvenience of public transportation in places like Los Angeles is going to be borne mostly by the poor and less well off.

  2. Any consumption tax is going to hit the poor harder than the rich. It's just the way it is. They can be targeted to mitigate that impact somewhat, but there's no way to make it go away completely. The poor already use far more public transit than the rich, and hopefully places like LA will work on improving theirs. It needs to be done at some point.

    Also, as the guy says in the column, someone's gonna get hurt when trying to price carbon. It's just not possible to make it painless, and the pain is kind of the point. You want it to change behavior, and it won't if nobody feels it.

    Regardless, a gas tax is a better idea for a consumption tax than a general VAT, which is an idea that gets thrown around a lot. I suppose conservatives like it because it would be regressive.

    While we're in fantasyland with a gas tax, it would be ideal to overhaul the whole tax system to make it more progressive, which would lessen the impact of the targeted taxes we like so much.