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Thursday, February 16, 2012

This is what I think....

IF...IF the president could see the larger picture and if he would adopt the parameters of the Bowles-Simpson plan, the election would be over right now...TODAY! Taxes would be off the table, the economy would shed the funk it is in, and Mitt Romney would be John Kerry, which is what I think is going to happen anyway.


Oh yea, and throw Keystone XL in there too.


Andrew Grodner said...

Can you provide link to a summary you think is most informative?

The first link in google is from Tax Policy Center and looks decent to me:
Looking at some of the provisions, I agree with the higher tax for gasoline. I think it is much more efficient way to force higher fuel MPGs and allow the market to determine what is the best alternative to fossil fuels. In some countries in Europe they pay $10 per gallon but nobody complains because they have smaller cars and probably use more hybrids.

Randall Parker said...

Ahhh JEEESSSUUUSSS CHHHRIST! Gas is already going over four bucks a gallon and you want to raise taxes on it? "Force" higher MPGs? Force kids to eat more fruits and vegetables? Force me to pay greater taxes for redistribuionist ideas of how the president wants to reshape my country? Now you know why I have Libertarian sympathies (except the gold standard)

Nobody in Europe complains because they have submitted their will to the state. Like Amy Winehouse said, "No, No, No!"

Andrew Grodner said...

I admit that I am biased towards some way to increase car efficiency and it may have nothing to do with any rational thinking :-). I also need to point out that when I lived in Poland I had to ride the buses most of my childhood, and what you see in the clip below was actually my daily reality (in fact, in Poland we had EXACTLY the same types pf buses, just red):

Did I get it right or wrong? Does Bowles-Simpson propose higher taxes on gasoline?

ArrrrrghDeeee said...

Amy Winehouse might have said "no, no, no" but Arthur Pigou would say "tax, tax, tax"......I think ya boy, Mankiw supports a gas tax of over $2/gallon.

I'm interested in your thought regarding the effects of enacting Bowles-Simpson being the "economy would shed the funk it is in". Maybe if Bernanke would have just manned up and put his money where his mouth was (as an academic), the funk would be (largely) gone. However, the disparity between the ivory tower and reality are obviously quite large.

Anonymous said...

I agree with Mr. Grodner. Increasing the tax on gas is a good idea for three reasons.

First, driving imposes a negative externality on society, so people who benefit from driving (almost everyone in society) should be paying more.

Second, the roaring success of Europe is evidence enough that the U.S. should mirror what's happening there.

Third, and most importantly, I hate poor people, so regressive taxes make me feel warm and fuzzy. If more of their money can be collected by the government, there will be more money to return to them in the form of welfare. This will help them stay poor forever.

However, if you don't hate poor people, don't worry. They can always buy a $45,000 Chevy Volt and reduce their gas tax expense.

And remember, the best tax policies aren't those designed to transparently raise the revenue needed to meet the obligations of government. The best tax policies are those that manipulate people's behavior, benefit some at the expense of others, and promote the latest big ideas coming from politicians in Washington.

It's all really quite simple. Have a great weekend, everyone!

Randall Parker said...

Hey Bub. You too and come back any time.

ArrrghDeee: What you you like the Chairman to do? I'm asking so you can tell us. Seriously, what would you do differently (please try to be pithy)?

ArrrrrghDeeee said...

How about everything he prescribed for Japan?

Andrew Grodner said...

Bub, these are three very compelling arguments for high gas prices. Indeed pollution from cars can reach up to 25% in major cities, Europe has reliable and flexible mass transport, and if we want to help the poor then tax on gasoline provides a potential one-way transfer for the poor because they usually do not own cars anyway.

The problem is that any tax, however well intended, creates deadweight loss and chokes the growth. Also, universal gas tax for everybody disproportionately extracts money from those who most benefit from driving. Thus, the problem is not that the tax on gas is not doing its job, be it collect more revenue or force higher MPG. The real issues is that it is a very inefficient tool to reach desired objective. Just like tax on tobacco can improve birth outcomes but has many negative effects as well, see:

Anonymous said...

Mr. Grodner,

In all seriousness, I'm really not that opposed to higher taxes on gasoline assuming tax rates are cut elsewhere, the economy is stable, and it's for the sole purpose of curbing pollution.

The idea that the government should be "forcing higher MPG" on us is simply ludicrous. Let's leave speculation and bets on future goods and services to the marketplace - not the government.

And by the way, according to the 2001 Census, around three quarters of all families in poverty owned a car.

I think your heart's in the right place, but your idea is like a bull in a china shop. I do enjoy the discussion though.