[lbo-talk] A Case for a Higher Gasoline Tax

[Gar Lipow]

On 1/12/06, Yoshie Furuhashi <furuhashi.1 at osu.edu> wrote:
>
> American businesses and working-class homes have sprawled, much as
> the girth of the average American body has expanded.  Just as many
> overweight Americans are suckers for schemes that promise weight loss
> without diet and exercise, many American leftists are suckers for
> fantasy solutions to social problems that do not cost American
> workers anything.  It's time to wake up and smell the exhaust.  The
> way to lose weight is to eat less and exercise more.  No pain, no
> gain.  The same is true for the path to environmental sustainability.
>
> Giving a carrot -- automated light rail systems -- without a stick
> won't work, for that presents businesses and workers with choices
> without proper incentives for the desired behavioral change in this
> case (i.e., make them prefer light rails to cars): light rails may be
> convenient, but cars are far more convenient than light rails in the
> existing environment.  You'd have to make automobiles less desirable
> in the eyes of businesses and workers than environmentally better
> (though less individually convenient) alternatives (like moving back
> to inner cities), and the way to do it is to make it more expensive
> to use them.
>
> Yoshie Furuhashi

I outlined a stick - capital taxes and regulation.  You tax purchases
of SUVs. You tax  purchases of energy wasting appliances. You tax
purchases of energy wasting industrial capital. And you use it to
subsidize purchases of more efficient products.  Incidentally, given
traffic and parking,  automobiles are not neccesarily more convenient
than a really good light rail system. The problem with existing mass
transit, aside from not always saving energy is that generally it take
double the time to travel by mass transit as by automobile for the
same start and end points.  A decent  light rail system could cut that
substantially. In some cases it might be the same - but even if it was
a third more, avoiding the hassle of traffic and parking, and having
to ability to read or relax instead of fighting traffic would be a
lure to a lot of people.  And if you had to  ONCE YOU HAD THE
ALTERNATIVE IN  PLACE I specifically said that a gas tax might make
sense. It makes no sense to punish people for not using an alternative
that does not exist. Put in the light rail, put electric cars on the
market (subsidized by a tax on the sale of gas guzzling  cars).  Once
people have alternatives then you can consider a gas tax.

Doug gave the example of study of  how U.S. inefficiency makes U.S.
industry less competive than European industry. But note that is true
at CURRENT  OIL PRICES and was true even when oil $35/barrel. In short
if price signals worked in this context, U.S. industry and autos would
already be a great deal more efficient than they are.  A great deal of
effort on this list goes to analyzing irrationality among the working
class, and a great deal of it is accurate. But it is worth noting that
irrationality is not confined to the working class. I'm arguing that
something has to be done. But I don't understand why when it comes to
energy efficiency a bunch of people who ought to know better  seem to
be adapting efficient market theory - in a time when even conventional

 economists are discarding efficient market theory and in an area
(energy ) where price signals produce lower effects than in normal
commodities.