Friday, October 20, 2006

Pigovian Taxes

Greg Mankiw says

here's a wacky idea you won't often hear from our elected leaders: We should raise the tax on gasoline. Not quickly, but substantially. I would like to see Congress increase the gas tax by $1 per gallon, phased in gradually by 10 cents per year over the next decade. Campaign consultants aren't fond of this kind of proposal, but policy wonks keep pushing for it.
Well, sure -- but I wish he mentioned what I think of as the primary reason, namely that such a tax will push new technology. In the long run, that's how we get to a world in which Wahhabism does not have the economic clout it now has, in which China can afford non-polluting technology, and so on. Actually my preference would be for an oil tax applied to all oil generated with traditional technologies--and yes, I'd accept oil from oil shale and from tar sand as being acceptable (with a warning that twenty years from now they might get taxed too, if priorities shift from the Long War to global warming.)

I was ambivalent about these taxes until 9/11. Since then, I've definitely favored them.


Post a Comment

<< Home