From: woodgold@emr1.emr.ca (Cathy Woodgold)
Subject: Re: Gas subsidies and taxes (was Re: Bicyc
Organization: Energy, Mines, and Resources, Ottawa
Date: Fri, 4 Sep 1992 19:42:00 GMT

Richard Stead:  Hello, fellow seismologist!

I agree with you almost completely about the gas tax.  Let me tell
you my thoughts on the matter.

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
about this is that it is generally a subsidy to the rich, since
most very poor people don't own cars.  More terrible, perhaps, is that
it is a subsidy to destruction of the environment.

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?

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:
-- An estimate of the health care costs caused by the additional cases
of asthma caused by car's air 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.
-- 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
could come up with more precise estimates by examining things like
how far out of their way people go to walk on streets with fewer
cars, or how often people travel out of the city mainly to escape
the cars.  There's also the inconvenience of having to wait to 
cross the road.  It's easy to translate people's time into monetary
units.
-- An estimate of the value of crops lost due to car air pollution.
-- etc.

If the tax is done in this way, a large amount of money would be
collected which I don't think should be spent only on transporation,
energy and environmental programs.  Why should gasoline be exempted from
a tax to support welfare, schools, etc?  And some of the money
collected in the "environment tax" could not reaasonably be spent
directly to alleviate the problems it's based on.  It could be spent
on other environmental programs.  For example, I don't think money
needs to be spent directly to reduce the noise on the streets;
all that is needed is a punitive tax that discourages driving, and
regulations about how quiet cars must be to be allowed to drive.
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.)

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?).

Here in Canada, I think we recently started having an "environment
tax" on car sales.  Cars which pollute more are taxed more heavily.
I think it's a great step forward;  but it's not nearly enough yet:
It's a matter of just a few hundred dollars, and I think some 
less-polluting cars have an "environment tax" of zero (I'm not 
sure of the details).

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

Cathy Woodgold
woodgold@seismo.emr.ca  OR  woodgold@emr1.emr.ca
There is so such a thing as a free lunch!
(This message is from me personally and does not represent
the policy of any organization.)
Newsgroups: rec.bicycles.soc