On Tue, 15 Apr 2008, Jordan Hayes wrote:
>> if I were the one being asked: gasoline taxes would go tomorrow.
Jordan, I loved your stuff in the congestion price debate. I thought you were at top form and that in the nobody laid a glove on you, although there might have been one or two weak points they left unprobed. But I can't yet follow you on this extension into no gas taxes. It seems like following a good principle beyond its applicability.
I mean, I totally grant that gas taxes are regressive, and that that should be counted against them. But if we accept that being regressive doesn't disqualify a tax all on its own, and that other thing might outweigh it, I think other things do -- namely that it's the best tool for its particular job, unlike bridge tolls or congestion pricing.
The period 1979-1986 seems to give pretty clear evidence that high gas prices lead over the medium term to a large scale renovation of the transportation fleet, with people buying smaller cars with better gas mileage. Within 5 years, the huge furry landboats and station wagons and vans that I made out in in my teens vanished from the scene and gave way to the mid size Japanese cars of my young adulthood when thank god I had a room. And then oil prices crashed in 1986, and half a dozen years later the great SUV plague was in full swing. And now in the Os when we've gone through a similar set of two oil price shocks (on in 2003 that made them high as 1973 and another one last year that made them as high as 1979), sales of them have finally reversed direction. Give us another 7 years, and the Explorer might become as rare as the velvet lined Oldsmobile with electric-powered planetarium seat adjustment.
And comparing internationally, it seems clear that Europe and Japan have got much more fuel efficient fleets in large part because they've got much higher gas taxes.
So since it seems we have evidence that high prices work on a massive scale to accomplish a good and important goal -- lowering energy consumption in the transportion fleet, and lowering energy consumption expectations; and since every competing option that might be better is just a theory; I can't see the justification for throwing gas taxes out. On the contrary, what this record suggests to me is an argument for raising them, and then finding some way to deal with the regressive effects as efficiently as we can. And since the 1970s oil price shocks had similar and even longer lasting effects on energy efficiency in general (because building and machine designers took longer to get convinced that energy would stay cheap), I'm quite open to the argument of generalizing this way of proceeding into a carbon tax.
So what's your counter argument?
Michael