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Saturday, August 25, 2012

Fatal Pareto

If you can't trust wonkblog who can you trust.

 Brad Plumer writes "Lately, some states have realized that the gas tax has a fatal flaw. When people buy more fuel-efficient vehicles, revenues drop. "

I comment.

Typo alert.  You wrote "a fatal flaw" when you meant "a non-fatal flaw."  Replacing the gas tax would be fatal to those who live on low lying islands and drown not to mention for those who die fighting to protect our oil supplies.

But enough about mere lives, lets talk about dollars.  Replacing the gas tax would make us poorer, because with a milage tax we demand more gasoline which drives up the price of petroleum which transfers money from oil importing countries like the USA to oil exporters.  The USA is not a tiny player in the world petroleum market and it is uh total economic idiocy to act as price takers.

I'm sure you support the gasoline tax.  I don't really believe my  typo joke.  So why ?

He concludes

Meanwhile, the CBO notes, a mileage-based tax has at least one drawback — it decreases incentives for people to buy more fuel-efficient vehicles. So if policymakers are trying to reduce gasoline and oil use, then a direct gas tax is a more straightforward way to go. But if Congress or state governments are looking for a more efficient way to bankroll their roads and bridges, then a VMT tax could be an option worth considering.

My comment concludes

How does "more efficient" mean "so that we send more money over seas" ?   I thought the idea of efficiency had something to do with getting the same result while spending less money not more.

I guess that some assume that incentive effects of taxes must be bad (because they assume markets are Pareto efficient but then don't know what the "Pareto" means (it implies among other things that  it's not a Pareto improvement if it is costly to Khameini  (personally)).  I guess that you just want to write about the feasibility of the VMT and make a totally nonsensical claim about its desirability if feasible in a really feeble attempt to convince your readers that they should care (before concluding that it is nonsensical then flipping and saying that efficiency has nothing to do with saving money).

Of course the headline is "Sick of the gas tax? A mileage-based tax might be a better option." and "might" makes right.  Also "could" in the conclusion  makes a bad argument good.  

Still the post is not up to Wonkblog's usual standards.

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