Monday, May 5, 2008

Follow Up-I've still got gas

One of our readers took minor umbrage with my post on gas-tax holidays and why I thought they were a bad (very bad) idea.

I think she was with me until my last paragraph, which I have included here to save you the scrolling:

I am extremely disappointed in Senators McCain and Clinton for supporting such a measure, when what is required is raising taxes on oil-based energy products to drive consumers to green alternatives. Bumper-sticker policies like this one are election year gimmicks, and I thought these two senators were better than that.

My point here was simply this. The government largely influences behavior through the tax code. The most blatant example would the be the cigarette tax. The states and the federal government have been raising taxes per pack to raise government revenue and steer people away from smoking with prohibitive pricing.

It's my contention that a similar method could be used to steer drivers away from less efficient vehicles. Essentially, create a sliding tax scale, the higher the fuel efficiency of the vehicle bought or leased, the less the driver will pay in taxes. It would force Detroit to compete and and level the playing field between costlier hybrids and electric vehicles and their gas-guzzling brethren. These currently alternative vehicles could then achieve scale, and begin to drive down their own costs.

Instead, our candidates are offering drivers a $28 tax break, which won't end up actually happening because the fuel companies will simply raise their prices.

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