Talking Gas Tax
December 28, 2008
Tom Friedman thinks now is as good a time as ever to implement a higher gasoline tax:
The first is geopolitical. Coal is significantly dirtier and emits more CO2 than other fossil fuels. Any attempt to tax carbon would probably affect coal relatively more than oil or natural gas. Of course, since coal is domestically produced and oil is imported from some of our worst enemies, a gasoline tax (or any policy specifically targeted at oil derivatives) would go further in decreasing America's reliance on foreign sources of oil.
The second is cultural. A gasoline tax would be a bigger disincentive to driving than a broad tax on carbon (although admittedly both would have some impact on driving incentives). Low gasoline prices, and other subsidies for auto owners and drivers throughout history (in addition to numerous other bad policies), have been a major force behind some of the worst sprawl in America. Plus, it has already been well documented that sprawling subdivisions have horrible impacts on the environment, lead to increased class segregation, and generally destroy any sense of culture and community. A gas tax would be a step toward addressing at least one of the contributing forces of sprawl, an issue that progressives should care about just as much as strict environmental concerns.
A final reason is simply logistical. We already have a federal gasoline tax in place; implementing a higher gas tax would merely require increasing the amount that government is already collecting. A general carbon policy would require an entirely new framework, time to implement, and new transaction costs. Ideally, the carbon tax might be great, it certainly looks good on paper, but realistically, the gasoline tax should be taken seriously by Obama while he still has the opportunity to do something about it.
Obama is coming in with enormous popularity. This is his best window of opportunity to impose a gas tax. And he could make it painless: offset the gas tax by lowering payroll taxes, or phase it in over two years at 10 cents a month. But if Obama, like Bush, wills the ends and not the means — wills a green economy without the price signals needed to change consumer behavior and drive innovation — he will fail.Yglesias thinks a carbon tax or emissions cap would be a better alternative:
A carbon tax, or a cap on greenhouse gas emissions with auctioned permits, would constitute a tax on gasoline among other things. And there’s no particular reason that burning fuel in a car should be disfavored versus other carbon-intensive activities.I understand that progressives typically have a strong passion for environmental issues, and looking at this from strictly from an environmental standpoint, Yglesias is probably correct that a carbon tax would ideally do as good (and maybe a better) job of decreasing CO2. There are a few specific reasons, however, why a gasoline tax solves more than just environmental and warming concerns and why it is preferable to a policy that only targets carbon.
The first is geopolitical. Coal is significantly dirtier and emits more CO2 than other fossil fuels. Any attempt to tax carbon would probably affect coal relatively more than oil or natural gas. Of course, since coal is domestically produced and oil is imported from some of our worst enemies, a gasoline tax (or any policy specifically targeted at oil derivatives) would go further in decreasing America's reliance on foreign sources of oil.
The second is cultural. A gasoline tax would be a bigger disincentive to driving than a broad tax on carbon (although admittedly both would have some impact on driving incentives). Low gasoline prices, and other subsidies for auto owners and drivers throughout history (in addition to numerous other bad policies), have been a major force behind some of the worst sprawl in America. Plus, it has already been well documented that sprawling subdivisions have horrible impacts on the environment, lead to increased class segregation, and generally destroy any sense of culture and community. A gas tax would be a step toward addressing at least one of the contributing forces of sprawl, an issue that progressives should care about just as much as strict environmental concerns.
A final reason is simply logistical. We already have a federal gasoline tax in place; implementing a higher gas tax would merely require increasing the amount that government is already collecting. A general carbon policy would require an entirely new framework, time to implement, and new transaction costs. Ideally, the carbon tax might be great, it certainly looks good on paper, but realistically, the gasoline tax should be taken seriously by Obama while he still has the opportunity to do something about it.
