jeffmcbride.net

As in Pigovian Taxes, of course. I’d like to throw the term around like I know what I’m talking about, but the truth is I just learned it and had to go to wikipedia to figure it out. It comes from Greg Mankiw’s post, The Pigou Club Manifesto. It’s almost two years old, but it’s new to me, so I thought I’d echo it again.  An argument for taxing gas consumption. He also has a more recent post about why the much more popular “windfall profits” tax on oil companies is NOT just as good.

I’d like to add road tolls as a much better way to pay for highway systems. They are paid for by taxes anyway, but the up front lump sum has no effect on people’s driving decisions; paying per trip would. It wouldn’t have to change revenue, but it could encourage more efficient use of roads, lower congestion, and those who used it more would pay more. With today’s high-speed toll lanes, it doesn’t even require a lot of toll booth lanes and extra delays to pay. Just drive through at 70, and the transponder on your windshield beeps to let you know you’ve just paid.  Plus, rates can be adjusted for areas of high congestion, or during peak times to spread the load.

This entry was posted on Sunday, August 10th, 2008 at 1:41 pm and is filed under Energy, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.