From: stead@skadi.CSS.GOV (Richard Stead)
Newsgroups: rec.bicycles.soc
Subject: Re: Gas subsidies and taxes (was Re: Bicyc
Date: 9 Sep 92 23:03:15 GMT

In article <1992Sep4.194200.29258@emr1.emr.ca>, woodgold@emr1.emr.ca (Cathy Woodgold) writes:
> Richard Stead:  Hello, fellow seismologist!

Howdy!  Yet Another Seismo Biker.

> I read that somebody calculated that in California, each car owner
> would have to pay about $2000 per year more in taxes in order to
> make the tax system fair and remove subsidies to cars -- and that
> was not considering all the environmental costs.  I assume the 
> situation is similar here in Canada.  One of the terrible things

The $2000 seems a bit high - If the average car was driven 12000 miles
a year at 20 mpg, that would be 600 gallons.  I would go for about $2
a gallon tax on gas (phased in over 2 years or something) initially.
That would be $1200 per car.  If there are about 100,000,000 vehicles in
the US, that would be $120 billion a year.  That is more than the total
spent per year by the dept's of energy and interior and all transportation
costs currently.  I imagine that $2000 per vehicle number must include more than
infrastructure and governmental costs.

> I would like to see a three-tier tax on gas (or the tax could
> be distributed somehow between car sales and gas).  The first tier
> would be the same tax that's on everything else.  We have sales tax
> here on just about everything -- clothes, shoes, toys, books,
> services, you-name-it, and sometimes food.  These taxes pay, among
> other things, for the welfare sytem, health care (not in your country,
> though) schools, scientists like me :-)  etc.  Generally, I agree with
> these taxes and expenditures.  Well, if they tax clothes and stuff
> to pay for schools etc., I think gasoline should be subjected to the
> same taxes, just like everything else.  Any reason why it should
> be exempted?

Personally, despite my rabid support for a gas tax, and my leftist leanings
on the environment, I am much more conservative in other areas.  I would
really like to see most taxes as directed taxes, rather than money that
polticians could spend willy-nilly as they please.  We have an absolutely
shameful deficit in this country because of politicians spending habits,
and the majority of that money (more than 50%) is spent on "entitlements" -
social security, welfare, medicare and other social programs.  If more
money is made available, it will just be thrown at these programs, essentially
to buy votes.  I think by directing the money, a lid is kept on the tax (
the tax will never be more than can be spent on the programs it is directed
to), and the taxpayer can see the tangible results of the cash he pays -
if he pays a directed gas tax, he will see research in alternative energy,
improved highways, a cleaner environment, better mass transit, etc.  This
will make the taxpayer more accepting of the tax.  This can be stretched
to a certain extent - for example support of higher education (to train
more energy engineers, or whatnot) without much difficulty.  I'd then
like to see income taxes reduced somewhat to compensate for the increased
revenue from gas tax and the fact that income taxes will no longer be
directed to gas-tax funded programs.  I'd also like income tax to be directed,
even if directed purely to entitlement spending.  At least the taxpayer
would know what his income tax is paying for.  He could then inform his
representatives of exactly how he feels regarding such taxes - yea or nay.

> On top of the basic tax, there would be an additional car-and-gas tax
> that would pay for the road system and other governemnt expenditures
> needed because of cars, such as salaries of traffic police.
> 
> On top of those two taxes, there would be an "environmental tax".
> The amount of this would be an estimate of the monetary value of
> the destruction and inconvenience caused by automobiles.  This would
> be a sum of many things.  For example:

I don't see any reason to separate these two areas.  Both are direct
costs of burning gas, so the tax should eventually be high enough to pay for
it all.

> -- An estimate of the health care costs caused by the additional cases
> of asthma caused by car's air pollution.

Difficult - it is certainly swamped by the health care costs of
cigarette smoking.  Yet, if we were to tax cigarettes appropriately,
it would just feed the black market.  Cigarettes should be banned
outright, like the other drugs.  Then maybe we could consider the
health costs of auto pollution.

> -- An amount -- say, $100,000 -- for each death caused by car 
> collisions, including car/pedestrian and car/cyclist collisions.
> -- An estimate of the health care costs due to injuries in car
> collisions.

That should be paid for out of insurance premiums.  I see no need for the
government to take over the role of the auto insurance industry.

> -- An estimate of the inconvenience caused to pedestrians by having
> cars on the road.  I guess that every time a car passes me on the
> road while I'm on the sidewalk, there's an average inconvenience due
> to noise valued between 0.1 cent and 1 cent.  (I would like to be able to
> hear my husband talk as I walk next to him, for example.)  Economists

That's a punitive tax that I'm not sure is needed.  If you tax auto noise,
then you really should tax any equivalent noise source.  That starts to
get really messy.  To me, a gas tax is not a punitive tax - it is a tax
to recoup the economic costs of burning gas in an automobile.

> -- An estimate of the value of crops lost due to car air pollution.
> -- etc.

Probably low - mosts crops are grown where auto pollution is less of a problem
(and most of the pollution is due to farm equipment and transportation
to and from the farms).

> all that is needed is a punitive tax that discourages driving, and
> regulations about how quiet cars must be to be allowed to drive.

Regulations requiring quiter cars are fine - such regualtions already
exist to a certain extent.  I don't believe in punitive taxes.  To me,
there is nothing wrong with driving, as long as the driver does pay the
full cost of his activities.  I believe he should have the freedom to
drive without paying punitive taxes.

> The environment tax, as I see it, is mainly a disincentive, not
> a way of generating revenue for environmental cleanup.  (The best
> way to clean up the environment is not to dirty it in the first place.)

True, and the tax could pay for research that would lead to transportation
that would not dirty the environment.  But I see the disincentive as
mainly a positive by-product of the tax, not its main point.

> My main fear with your rule about spending the money only on
> certain things is that it would result in lots of money going
> into the road system.  In my opinion, there's already too much
> money going into the road system;  it encourages people to drive
> cars.  I'm not against large amounts of money going to help the
> environment somehow -- (how?).

If people are willing to pay the full cost of the roads and to clean up
the environment, I see nothing wrong with improving the roads.  Roads
give me more places to bike, too :-).  So long as they don't try to
put them through any of the few pristine environments we have left.

> I agree with Joe Hollinger's explanation about correction of
> market failure.

Right - That's my view pretty much as well.

Anyway, I think we agree on the basics, but disagree a bit on execution.
I would have no problems with your system if I thought I could trust
politicians.


--
Richard Stead
Center for Seismic Studies
Arlington, VA
stead@seismo.css.gov
Newsgroups: rec.bicycles.soc