From: pswanson@phoenix.Princeton.EDU (Paul Swanson)
Subject: Re: BUSH Administration Hushes Auto Efficiency Studies
Originator: news@nimaster
Organization: Princeton University
Date: Thu, 3 Sep 1992 20:31:49 GMT

In article <v1jnbgr.adamsr@netcom.com> adamsr@netcom.com (Rick Adams) writes:
>Thus spake mst4298@zeus.tamu.edu (Mitchell S Todd): 
>
[lots of stuff about CAFE standards deleted]
>
>	Instead, how about putting research money into alternative energy
>sources and into mass transit rather than into weapons?
>
>>	The best way to reduce CO2, NOx, and other auto emissions
>>	is to use tax policy to increase the price of gasoline.
>>	As gasoline prices increase, so will the demand for high
>>	fuel economy. As gas prices increase, people will drive
>>	their cars less. Also, as prices increase, people will be
>>	more willing to use alternate means of transportation,
>>	like bicycles, trains, walking, etc. 
>>
>	No, the POOR will be forced to do so, but the rest of the people
>will simply continue to drive instead. Regressive taxes are seldom the
>answer to any question other than "Now how can we screw the poor?"
>
>	In addition to the regressive nature of the taxes, increases in
>gasoline prices will simply result in more increases in other areas to
>compensate, thus the major contribution will be to inflation - something
>Bush has been quite good at contributing to without any MORE help!
>
Where to begin?  Well, first lets look at one positive aspect of a
gasoline tax - namely the more you consume (or polute) the more you pay.
This seems to me to be an exceptionally fair.  In fact, I can't think of
a more fair way to dissuade gasoline consumption (and this, after all,
is the purpose of the CAFE standards).  

Now, is the tax regressive?  Well I believe that the wealthier one is
the more gasoline one tends to consume so a gas tax will only be
marginally regressive.  Still, it will be regressive.  The more
important question is does this matter?  It depends on how you view
private auto travel.  If you view it as a luxury then the fact that a
gas tax is regressive is irrelevant.  If, however, you view private auto
travel as a necessity then - well then we're screwed.  The reason I say
this is two fold.  First, autos are probably the single largest source
of polution in this country (remember, those refineries are poluting to
make gasoline for your car).  Second, private auto travel is obviously
not a necessity.  Anyone arguing that it is a necessity hasn't seriously
looked at the alternatives.  Such a claim seems extreemly self serving
to me and suggests a viewpoint that reducing energy consumption (and
polution) is a nice goal just so long as I don't have my lifesytle
adversely affected. 

But even assuming that the gas tax is bad for whatever reason (if you're
progressive because it is regressive, if you're conservative because it
increases taxes) there is no law that says the extra revenue generated
can't be compensated for in some other way.  I personally prefer that
the standard deduction be raised but substitute the compensation of your
own choice here.  The point is that any regressive nature of a gas tax
can be counteracted by other changes in the tax code.

In regards to inflationary pressures that might arise from a gasoline
tax remember that only transportation costs might be adversely
affected.  I say might because I think labor costs dominate the cost of
transportation, not energy costs.  Further, transportation costs seldom
make up a very large percentage of the cost of a product.  So
inflationary pressures due to a gas tax will be minimal.

There is alot more that could be said on this issue but this is quite
enough for one post.

Paul.