John Tierney spends his second consecutive NYTimes Opinion column ($$$) on the merits of the gas tax:
I have a modest proposal to fight global warming, save energy, cut air pollution, ease traffic congestion, reduce highway fatalities and, while we're at it, reform Social Security.
All we have to do is raise the federal gasoline tax by 50 cents per gallon and refund all the new revenue directly to Americans by putting it in new Social Security individual accounts.
Has the guy caught my gas tax "monomania!" (Google returns 173 pages after a search of "gas tax" at http://www.env-econ.net.)
Tierney gets Grover Norquist on board by tying the gas tax to private social security accounts:
But Norquist reassured me I would not be cast into the abyss. He said a 50-cent gas tax, with all the revenue refunded to personal accounts, wasn't verboten. "If it were attached to one of the annual tax cuts that we've been passing so that the overall package reduced taxes, it wouldn't violate the no-tax pledge," he said.
Tierney gets hold of Gary Becker, who is already on the gas tax team:
"If you used a gas tax as an end run to start personal accounts for people, you might strengthen their savings habits and get them to start contributing their own money," said Gary Becker, the Nobel laureate economist. He and other economists especially liked the notion of encouraging energy conservation through a gas tax instead of the current approach of mandating fuel-economy standards for cars.
Tierney has read Austin and Dinan (below) on comparing a gas tax to CAFE standards:
A 50-cent tax would save much more gasoline and avoid some of the perverse effects of the fuel-economy rules, which encourage people to drive more because their new cars save them money on gas. A gas tax makes people drive less, not only saving gas but also easing congestion on the roads and reducing pollution.
Tierney has read Parry and Small (below) the magnitude of the gas tax:
Although 50 cents per gallon may seem high (slightly more than the total current federal and state taxes on gas), it's in line with the calculations of the economists Ian Parry and Kenneth Small. They figure that the tax should increase 60 cents per gallon to compensate for the congestion, pollution and other costs that drivers impose on society.
Tierney gets a CATO endorsement, I think, on the revenues:
A 50-cent tax increase would reduce driving but still yield nearly $70 billion in extra revenue annually, according to Peter Van Doren, the editor of the journal Regulation at the Cato Institute. There would be enough to put about $440 into the personal account of every worker now paying into Social Security.
Note:
He references two recent papers by current and former Resources for the Future-ers that (1) show that the gas tax is preferred to CAFE standards and (2) attempts to determine the best level for the tax:
"Clearing the Air: The Costs and Consequences of Higher CAFE Standards and Increased Gasoline Taxes" by David Austin and Terry M. Dinan. Journal of Environmental Economics and Management, Forthcoming.
"Does Britain or The United States Have the Right Gasoline Tax?" by Ian Parry and Kenneth Small. American Economic Review 95, pp.1276-1289, 2005.
For the non-economists out there, the AER is the top journal in economics and JEEM is the top journal in the field of environmental economics. Not rags.
