85 per cent of all journeys by car

Max B. Sawicky sawicky at bellatlantic.net
Sat Mar 23 09:14:42 PST 2002


I spend a lot of time inveighing against regressive taxes, but I am more concerned about the impact of a shrinkage of the public sector. Pressure on the sector derives in part from denunciations of taxes. A regressive tax typically finances expenditure that more than offsets the distributional impact of the tax. In other words, social-democracy as far as it goes is a good thing.

My specific references to gas taxes were in the context of a discussion about green policy, and the simple point is that a green tax offset in the income tax accomplishes green objectives without distributional harm. The income tax measure in question, in this context, is tax relief, clearly easier than tax increases (except in Washington state, and about six other states w/no income tax). Nothing is easy.

There is voluminous lit on the progressivity of the income tax, capital gains breaks notwithstanding. Minimal effort on your part could unearth it.

There is something to what you say about the use of debt as a crutch that relieves politicians of the need to sell progressive public expenditure. I would say this also applies to progressive taxes. If public spending is good for the average person, then he or she ought to be willing to pay for it. If there is some other way to finance it, i.e., taxing the rich, all well and good. But in the final analysis, any such spending should be able to stand on its own.

cheers, mbs

C. Sawicky,

Regressive taxes don't matter? Interest payments to the wealthy on increasing government debt don't matter? It can all be made up for in the income tax? Come to Washington state and try to get an income tax even started. With capital gains taxes as low as they are how can we even say the American income tax is progressive?

It's a dogfight to get the wealthy to pay their share in this or any industrialized country. You can't go around excusing regressive sales taxes and high government debt. It may be convenient but it's bad policy for working people.

By the way it's completely clear to me that roads always fill to capacity. The only way you can reduce car trips is, effectively, to increase traffic and choose mass transit over cars. That only works politically if people believe that transit is being designed for them and not for some notion of environmental virtuousness. Heartfield may be wrong about mass transit but he is right about mass transit's being a largely elitist concept. Regular folks really love their cars and why shouldn't they? Cars are designed to work for them, while mass transit is most often a political football. The politics of developing mass transit to be an effective transportation subsidy for working people are very problematic. You need a commitment to a very high level of subsidy so that as little resentment between communities forms as possible.

That's another knock on financing government spending with debt, by the way: you shortchange a worthy public policy of political commitment to it. You accomodate and enable politicians' underselling important policies.



More information about the lbo-talk mailing list