Arnold Kling  

More Hawkish than Mankiw

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A new economics blogger is really keen to hike the gas tax.


You may criticize the high-tax ways of Europe, but here the latter is dead right: with taxes at $5-6 a gallon, they are about right in pricing the externalities. In the US, externalities may be lower, as there is less density and thus congestion, and more land to absorb pollution. A $3 tax per gallon should entirely reasonable. It can be introduced gradually, say 5 cents a month over a five year period. And do not tell me the voters are against such tax increases, they actually favor it (pdf), as long as the revenue displaces some other tax like the income tax. This makes perfect sense, as a gas tax discourages a bad, while income tax discourages a good.

I would favor this sort of gas tax if we could also

--abolish the department of energy
--get rid of all subsidies for ethanol and other alternative energy sources
--get rid of CAFE
--never hear the utterly demagogic phrase "energy independence" again


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COMMENTS (7 to date)
Floccina writes:

--abolish the department of energy
--get rid of all subsidies for ethanol and other alternative energy sources
--get rid of CAFE
--never hear the utterly demagogic phrase "energy independence" again

Wow those are exactly my thougts too.

jp writes:

That's a fair trade. I've often thought that I'd be happy to keep our entitlement programs, regulatory bureaucracy, etc., exactly as they are, if I could also be assured that the government would never get any larger.

John Fast writes:

I completely agree with you about getting rid of CAFE and subsidies, which we should do regardless of whether we have a gas tax or not. I don't mind keeping the Department of Energy as a figurehead agency.

The costs of bureaucrats' salaries are insignificant compared to the damage done to society by taxes, subsidies, counterproductive regulations, and laws which are simply evil (such as the War on Drugs, or laws against homosexuality, prostitution, pornography, or other sexual behavior involving only consenting adults).

Arnold: as a fellow bleeding-heart libertarian, why don't you post comments on this fellow's blog? For the benefit of both the blogger and his readers!

True Conservative writes:

Oh, yeah, all that government cripples economies. Look, here's proof:

http://www.typepad.com/t/app/weblog/post?__mode=edit_entry&id=43002740&blog_id=87211

Barkley Rosser writes:

Oh, good lord. Another one of these anonymous economics bloggers. Bah!

Troy Camplin writes:

Good tradeoff. Let's get rid of any and all gas and oil subsidies while we're at it. And require that 100% of all gas taxes collected go to roads.

Geoffrey writes:

"Let's get rid of any and all gas and oil subsidies while we're at it"

What oil and gas subsidies???

Oil and gas leases (at least on federal and state land) are sold by the government.
The production must pay royalties to the government.
The commodity has a huge excise tax to the government when finally sold to consumers.

What subsidies can you possibly be talking about???
(Note: reducing some tax from one level to a lower level is NOT a subsidy)

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