[lbo-talk] taxes (was: more on fuel economy

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Fri Jul 20 17:20:55 PDT 2007


Wojtek asks:

[ stuff about the private cost of goods elided ]


> What in your view makes government imposed fees for goods and
> services (aka "taxes") in-efficient, but privately collected fees
> for goods or services (aka "prices") efficient.

I don't give a hoot about the efficiency of your "prices" above, because if it's inefficient, it will go out of business, and who gives a fig if K-Mart goes out of business? I do care about how efficient the mechanism by which a central government (be it local, state, or federal in the US) collects taxes and redistributes the revenues in the cause of making the country I live in a better place. So: it is not a question of inefficient-as-compared-to-private-industry, but rather the much simpler: efficient or not?

Before we start: you seem to have a linguistic bug up your butt, so please put on your glasses that transmit the term "user fee" to your brain in each case where I save some keystrokes and write "tax" below. You'll feel much better.

---

My claim: Regressive or flat (which are also regressive, but I digress) traditional income taxes aren't all that efficient: if you tax a poor person $1 and give them $0.60 of benefits, you've wasted $0.40 ... better to have not taken the dollar in the first place. Warren Buffet agrees with me, and he's rich and you're not, so let's move on. Anyway, things like bridge tolls are even worse than that! The Bay Bridge here in the SF Bay Area has had to steadily increase the cost of the toll because their efficiency went negative: it was costing them more to maintain the toll mechanism than they were collecting. And: like I've said before, this doesn't take into account the net drain on GDP from the delay or the environmental pressure from congestion-caused-pollution. I read a study that said Bay Bridge congestion (the metering lights go on at 5am) costs GDP about $9B/year ... total (gross) revenue for the bridge: $600k/day. Tha's conservatively $200M/year. Can you say inefficient? And of course, the NET revenues collected are something like 30% of that. $60M for a $9B cost. Which side would you like to be on?

And why? Because dimwits say: I don't use the bridge, why should I pay for it?

Oh, and you say it "can be efficient due to EzPass" -- eh? Do you know how that works? The bridge authority purchases (single source, 'natch!) the hardware. No one notices, because it's "capital expenditure" and not "operational" funds, but by the time it's paid for it will be obsolute and in need of upgrade. Then it pays the (private) company to install, maintain, and operate the equipment. how much you ask? A lot! Often it's 30% of the take! So yeah, when it was $3, that's $0.90 ... how long before they raise it to $4 to cover that cost? In the blink of an eye! Except of course now it's $1.20 ... and on.

Let's back up: my earlier statement was that things like this should all be paid by the General Fund, which gets most of its revenues from a (mostly progressive, but see below) Income Tax. If progressive income taxes are good for paying for the FDA, why not for the bridge?

San Francisco's meter maids are in a similar situation: they are running a DEFICIT! How can that be? Well, they projected $12M of revenue, so they had a budget meeting and decided to spend $6M getting it, and at the end of the year found they only actually collected $3.1M. Oops: the city paid nearly $3M for nothing (sorry public school kids, you don't get paste this year!). And, they increased the stress level of everyone around and by making parking scarce have caused congestion and pollution by making some people drive in circles for 20 minutes to find a parking place that's good for 15.

One word: inefficient!

Now, where were we? Oh, right: I want a government that collects taxes and spends them wisely and efficiently to push forward a society that's worthy of being called "the richest in the world" -- not just for the top, but for everyone. There's lots of precedent here: the US has built infrastructure for all to use freely before. Why not now? Because dimwitted people have decided that things like National parks have to "pay for themselves" -- and thus we have new taxes, but non-uniformly applied. And of course the National Park doesn't have any money to operate a permit, license, toll, security for the money collected, transportation for the money collected, accountants to count and tally the money ... you get the idea here ... so what do they do? They raise the price to cover it! They "show a profit" but if you look closely, a huge portion of the money raised goes to raising the money!

You wouldn't take this from the United Way, why should you do it from your government?

Oh right, and the other "efficient" way you suggested was to get it at the pump. But the pump lies: why am I filling up my SUV today? Is it because, as you say, I'm a "fathead" and deserve to pay more? Or is it because I need a larger vehicle because I'm disabled and my whizzy robotic wheelchair that Chuck Grimes helped me build on his weekends off in exchange for martinis fits better for my 3-times-per-quarter 20 mile trip to my sister's house? The pump doesn't know.

If I buy a hummer and drive it 3k miles/year, what's my footprint compared to your prototypical Prius driver who commutes to Silicon Valley 100mi/day? Note: I drive about 3k miles/year, so it doesn't matter a whit what kind of car I drive.

You want user taxes because you believe you won't have to pay them. It also keeps coming back to: I don't {go to National Parks, have children who attend school, drive an SUV, whateverthafuk) -- and that's precisely the point (so elloquently put forward by our sick(o) Canadien friend): being sick is no prize, and if you were sick I'd want you to get health care pros taking care of you too. Similarly, if you have to commute of that godddamn bridge everyday, I want you to do it in as low-stress and low-carbon footprint of a way as possible. I work at home, so I don't pay many bridge tolls. But I'd happily have it come from the General Fund.

I agree with Ravi: you want to form a philosophy out of a peeve.

Well, no thanks.

/jordan



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