by Greg Krehbiel on 15 January 2013
The Obama administration is proposing to eliminate the federal gasoline tax and replace it with a tax based on the number of miles you drive.
This is a classic example of bad government, and it shows why central planning doesn’t work — viz., because central planners don’t know what they’re doing.
First they try to push a certain behavior — in this case, fuel efficiency — so people go out and buy fuel efficient cars. But wait — that creates another problem, so they make a new rule that changes the incentives.
How are people supposed to make rational decisions when the government keeps changing the rules?
And how is the government going to monitor how far you drive, anyway? A new agency? New federal regulations? A new device you have to install in your car?
The problem is that the federal government isn’t raising enough money to pay for maintenance of the roads. Assuming that’s really true, the obvious solution is to raise the tax on gasoline.
No, I don’t like higher taxes any more than you do, but I do think we have to pay real costs. I use the federal highways, and if it costs more to maintain them, then I have to pay more for that privilege.
All other things being equal — which they never are — a fee per mile makes some sense. So would a fee based on the gross weight of the vehicle. So would a fee based on whether you drive locally or use the highways. So would a gasoline tax, or a tire tax, or a tax on your vehicle registration.
There are any number of ways to raise the money. The question is which one creates the best incentives, and a gasoline tax seems right to me because it gives people an incentive to buy more fuel-efficient cars.
-- 2013-01-15 » Greg Krehbiel