Or, for you UK-ians, a petrol tax. By way of Mark Thoma, we come across an article extolling the virtues of increasing the gas tax:
Cars and light trucks produce about 15 percent of U.S. greenhouse gases. The best policy for reducing energy consumption from those sources, Knittel believes, would be higher fuel prices. “That would incentivize all the things we want,” Knittel says. “When gas prices go up, people shift to more fuel-efficient cars, they drive fewer miles, and insofar as there are lower-carbon-intensive fuels out there, people shift to them. They get rid of their clunkers faster.”
That’s not just an assumption; Knittel has studied the responses of auto owners nationwide to rising gas prices from 1999 to 2008 in another research paper, “Pain at the Pump,” co-authored with Meghan Busse and Florian Zettelmeyer of Northwestern University. The researchers found that with each $1 rise in the price of gas, purchases of highly fuel-efficient autos increase 21 percent, while purchases of gas-guzzling vehicles drop 27 percent.
A shift to newer, more fuel-efficient vehicles would actually help people in another way, besides releasing fewer greenhouse gases: It would reduce the amount of harmful local pollution in the air…
That produces significant health benefits beyond the problems associated with climate change. “We’re talking about asthma attacks and respiratory problems,” he adds. “This isn’t just a matter of helping the world two generations from now. You can point to this and say, ‘Here is a more immediate, salient reason for a gas tax.’” According to Knittel and Sandler, 70 percent of the costs of a gas tax of $1 per gallon could be recouped by immediate health benefits from reduced pollution. Other possible benefits from the tax — reductions in climate change, traffic congestion and accidents — could make it a net winner for people in economic terms alone.
I basically agree. But.
I remember when I was living close to the bone, in a crappy apartment 75 yards from the LIRR. If someone had told me that I would end up paying $300-$600 per year more in gas tax, well there is a problem: I couldn’t afford it (and we’re not talking about having to remove my kids from private school, but basic necessities). And I didn’t have a choice-my job was in suburban Long Island, and a car was every bit as essential as oxygen. It’s like that in many parts of the country. While we can talk about net gains, there will be some losers–and they will be those who can least afford it.
What I would do instead, although I think it’s even less realistic than a gas tax increase, is charge the gas tax up-front. Basically, assume a new car will be driven 120,000 miles at city mpg estimates, and add the dollar tax to the price of the new car (e.g., a car that gets 20 mpg would use 6,000 gallons, and thus be taxed $6,000 at time of purchase). This would, at least, give the financially strapped options while shifting us over to newer, more efficient cars.