Taxing gas and taxing waste
But the point of a gas tax wouldn't be to directly cause less fossil fuel consumption. It would be to pay for programs which would potentially change the consumption landscape such that less gas would be consumed. For instance, a gas tax could pay for solar and wind subsidies. Given lots of solar and wind capacity, we'd need less coal and natural gas to make electricity. We could subsidize the development of hybrid or pure-electric power trains, or fuel cells, or telecommuting technology, or transit systems, or smart highways. Programs like this would decrease gasoline usage.
The article makes the point that "The solution [for greenhouse gas reduction] is not more virtuous behavior or slightly more fuel economy, but new infrastructure." True, and that's what a gas tax would (hopefully) go to fund.
More generically, what would a tax policy look like which penalized waste? That is, what if we charged taxes per can of garbage, per ton of carbon or sulfur emitted. This would end up looking like a use tax. As such, it would tend to be regressive. Our main regressive tax right now is the FICA tax. I think it would be interesting to see what it would take to replace part of FICA with this sort of waste tax.
On the other hand, the tax can be lessened by being careful -- composting garbage, turning out lights, getting a more fuel efficient car, that sort of thing. Some of that will be behave regressively (people who lack means to buy double-paned windows or an electric car), but some will behave more progressively (smaller houses and fewer cars have smaller energy needs; taking the time to make sure recyclables and compost are separated and that the lawn is small and only gets watered when it needs it). So it could be that part of the income tax could be replaced with this sort of tax. ¶ 8:04 PM
Wednesday, November 12, 2008
Grist has a good article (via Ezra Klein) on making a gas tax. Specifically that it won't work. One of the main points in the article is that the elasticity of demand for gas is so low that it would take a politically impossible level of taxation to make any difference in consumption. That is true if you consider direct effects only. During the huge gas peak of 2007-2008, demand for gas did drop a bit (during a doubling of price), but obviously it would take a multi-dollar-per-gallon tax to really affect consumption dramatically.
But the point of a gas tax wouldn't be to directly cause less fossil fuel consumption. It would be to pay for programs which would potentially change the consumption landscape such that less gas would be consumed. For instance, a gas tax could pay for solar and wind subsidies. Given lots of solar and wind capacity, we'd need less coal and natural gas to make electricity. We could subsidize the development of hybrid or pure-electric power trains, or fuel cells, or telecommuting technology, or transit systems, or smart highways. Programs like this would decrease gasoline usage.
The article makes the point that "The solution [for greenhouse gas reduction] is not more virtuous behavior or slightly more fuel economy, but new infrastructure." True, and that's what a gas tax would (hopefully) go to fund.
More generically, what would a tax policy look like which penalized waste? That is, what if we charged taxes per can of garbage, per ton of carbon or sulfur emitted. This would end up looking like a use tax. As such, it would tend to be regressive. Our main regressive tax right now is the FICA tax. I think it would be interesting to see what it would take to replace part of FICA with this sort of waste tax.
On the other hand, the tax can be lessened by being careful -- composting garbage, turning out lights, getting a more fuel efficient car, that sort of thing. Some of that will be behave regressively (people who lack means to buy double-paned windows or an electric car), but some will behave more progressively (smaller houses and fewer cars have smaller energy needs; taking the time to make sure recyclables and compost are separated and that the lawn is small and only gets watered when it needs it). So it could be that part of the income tax could be replaced with this sort of tax. ¶ 8:04 PM
