85 per cent of all journeys by car Subject: Subject:

Gar Lipow lipowg at sprintmail.com
Fri Mar 22 09:01:52 PST 2002


MaX

>The regressivity of the gas tax is true but irrelevant; any such tax could be compensated for in the income tax. How effective it would be is another matter.

Just to emphasize something I said a few days ago in a previous post:

Well crafted regulations are more effective in improving efficiency than

energy taxes. Of course energy taxes will have some effect; the problem is that when buying a car or a house, other factors tend to (quite rationally) be more important than how much energy it requires to run. If ALL cars or ALL homes are required to meet a reasonable efficiency level, the cost of energy saved will exceed the required rise in price - thus a net gain to the consumer.

An energy tax, in contrast, will leave it to the vagaries of the manufactureers as to whether to make this sort of improvement. Given that a car or home is a bundle of features, it is quite likely that car sales can be improved better with some improvement other than energy efficiency - possibly even an increase in the advertising budget.



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