by Alex Tabarrok
on February 9, 2010 at 7:17 am
in Current Affairs, Economics
Why raise the cigarette tax when you can just tax breathing?
So asks Andrew Samwick in an effort to explain the illogic behind replacing a tax on gas with a tax on miles driven.
Yeah, because breathing totally causes cancer the way cigarettes do. A gas tax is superior to a miles-driven tax, but this is a horrible way to make that point.
Aside from the merits of a gas tax or a miles tax, enforcing a miles-driven tax would be a nightmare. There is no good way to do it without compromising both freedom and anonymity.
Neal, read the post again.
I agree with Timothy- I don’t understand the “illogic” of having a user fee. I guess all taxes are just anathema to libertarians. I guess roads should just spontaneously generate! Why didn’t we come up with this sooner?
If the externality you are trying to disincentivize is carbon emission, then a miles driven tax is akin to taxing breathing to discourage smoking. It’s illogical because it’s extremely poorly targeted. If the externality you are trying to discourage is road wear and tear or possibly congestion, then miles driven is the perfect tax.
I agree with Timothy- I don’t understand the “illogic” of having a user fee. I guess all taxes are just anathema to libertarians.
No. Libertarians tend to support things like smart toll roads that charge per use on a sliding scale depending on demand/congestion. I’m not sure what Alex is thinking here.
For a libertarian, the problem with use-based road taxes is the potential for government surveillance. Any GPS technology that can track your road use in detail has the potential for very serious abuses. For that reason, on balance, I’d rather see higher road taxes than use-taxes based on government-mandated GPS tracking boxes.
jhl, wlu2009, et al., if you read the (quite short) post by Andrew Samwick that Alex links to, you’ll see that Andrew Samwick specifically notes that congestion taxes make a lot of sense. That’s not the same thing as a generic miles driven tax, though, as he points out.
I’m very disappointed in all of you for rushing to comment before reading the linked post.
There’s some argument to wear-and-tear on a road, but that’s not really proportional to exact miles driven either, due to car weight and everything.
Tom, lots of things seem to have a lot of problems, so…
Three instruments are necessary for three objectives: one to pay for roads, one to tax the externality of adding to apmospheric CO2, and one to tax the externality of congestion.
Andy, citi.zen, and ThomasH win this thread. Everyone else loses.
This reminds me of Clinton’s regrettable attempt at a BTU tax. It would have taxed all energy, however derived, and wouldn’t have allowed people to trade away to cleaner sources. Basically, since energy use is more inelastic than any particular source, it was a revenue grab rather than an attempt at creating a cleaner environment.
By the way, this is now a moot conversation/straw-man at the national level, since Obama committed not to implement such a tax.
However, there was a pilot program for sedans in Oregon we should pay more attention to:
Oregon also has a weight-mile tax for trucks.
The heavier the vehicle, the more fuel it burns. The more emissions, the more fuel it burns. The further you drive it, the more fuel it burns. The more time it spends idling in traffic, the more fuel it burns.
It seems a basic gasoline tax provides all the useful incentives without any complexity. Yes, the magnitudes are off, particularly for congestion, which would be better managed by EZ-passes anyway.
Why are so many taxes.That is a problem I really don’t understand.Every 2 years there are new taxes or bigger ones.Why is that?I heard about a tax for the water of the rain.Come on is that for real?.It is enought I guess that we, the people who smoke are likely to catch different diseases and things like that.Do we really need to pay extra taxes?E Cig Starter Kits
Comments on this entry are closed.
Previous post: Assorted links
Next post: The last words of Socrates (according to Plato)
Email Tyler Cowen
Follow Tyler on Twitter
Email Alex Tabarrok
Follow Alex on Twitter
Subscribe in a reader
Follow Us on Twitter
Marginal Revolution on Twitter Counter.com
Get smart with the Thesis WordPress Theme from DIYthemes.