Read it and weep future billionaires of america

[Dauphin]

Quite so. Joe Public is already taxed more than a haulier. Therefore I don't see unfathomable problems with replacing some of the duty on fuel with a higher rate of VAT to achieve the aims you want.

As far as I am aware, fuel "duty" is preferred as it then gives a fixed revenue stream/cost stream not dependent on the price of petrol as it goes up and down. It's arbitrary terminology though.

[Kuciwalker]

No it isn't political, when transport companies raise their costs the amount of business they get falls. People cut down on the number of deliveries they send, they hold stuff back unless it's absolutely necessary etc etc. It has a very real impact on businesses.

That's exactly the point of a carbon tax. If people responded to a carbon tax by just ponying up and consuming the same amount of gasoline as before, it wouldn't actually prevent global warming, would it? Any scheme to reduce CO2 emissions is going to have to cause people to use less fuel.

[kentonio]

That's exactly the point of a carbon tax. If people responded to a carbon tax by just ponying up and consuming the same amount of gasoline as before, it wouldn't actually prevent global warming, would it? Any scheme to reduce CO2 emissions is going to have to cause people to use less fuel.

Let's be realistic, if we're going to do anything with enough impact to affect how badly we're screwing with the climate, it's going to need to be something much, much more radical than just pushing a small percentage of people off the road. Things like this don't do anything big enough to solve our environmental problems, they just screw over small companies and individuals.

[snoopy369]

The point is to accurately price the carbon emission. Some people will stop creating CO2, some will pay for it, some will do some of each; but if the pricing is accurate, we get enough $ out of the tax to clean up the amount of CO2 (or otherwise offset the CO2 from some other technology, say government investment in Solar or Wind or something) that is produced, or build more trains/busses/etc., or what have you. It's not entirely about changing behavior - it's also about _fixing_ it.

[Kuciwalker]

Let's be realistic, if we're going to do anything with enough impact to affect how badly we're screwing with the climate, it's going to need to be something much, much more radical than just pushing a small percentage of people off the road.

Then we have to make the tax high enough to push a large number of people off the road.

[kentonio]

Say taxing drives 65% of people off the road. Is it ok if those 65% are the poorest people and the remaining 35% are the richest who can afford to swallow the extra tax without changing their behavior?

[Dauphin]

Haven't you already said you want to tax most private use off the road in favour of commercial interests.

[kentonio]

Not exactly no. I said that for environmental reasons it would make sense to get oil based fuels out of use as much as possible but that protecting commercial use was far more essential to not tanking the economy in the process (at least in the short term).

[Kuciwalker]

Short version: yes.

Long version: this is how everything works. We have scarce resources. Right now, today, there is less gasoline than people actually want. If I could conjure gasoline out of thin air I would be able to find people willing to use it. This is true of almost everything in the world except air and (in some places) fresh water. It's true of houses, it's true of haircuts, it's true of cars and pizzas and iPhones.

THE question of economics is: given that more people want stuff than can actually have stuff, how should we distribute the stuff? The answer, for almost every single type of stuff in existence, is that we define a price for the stuff (in units of money) such that the number of people who are willing to buy the stuff at the given price is equal to the actual amount of stuff, so we don't have shortages or unused inventory. Usually we don't actually set the price directly; we let individuals and businesses figure out what price balances out the quantity of stuff and the desire for stuff.

Then people who are willing to pay that price get the stuff, and people who aren't, don't.

This all brings us to your question:

Say taxing drives 65% of people off the road. Is it ok if those 65% are the poorest people and the remaining 35% are the richest who can afford to swallow the extra tax without changing their behavior?

Well, what does it mean to be rich?

Normally we say someone is rich if they have a lot of money. This makes sense in a world where money is exchanged for scarce resources at flat prices. But imagine a world in which prices were all set as a % of your money. Someone with twice as much money would have to pay $2 to your $1. It's pretty obvious, here, that everyone is actually equally "rich". And in a world where scarce resources aren't allocated via prices, but instead via some complicated system that earmarks a bunch of stuff for the people who don't have much money, money no longer has anything to do with being rich. If "driving" were the only resource in the world, then whoever ended up getting to drive would be rich and whoever didn't would be poor.

So your objection pretty much boils down to not liking the idea of rich people in the first place.

This is actually a perfectly sensible objection that is held by almost every economist. It would be ideal if there were no rich people and everyone had equal-ish amounts of stuff. The problem is that we have to give some people extra stuff in order to give them a reason to come to work and make the stuff in the first place. So we compromise: each person is allocated stuff commensurate with how much they produce, but then we redistribute (via taxes) some of the stuff from those who have a lot to those who have little. We're then just left with the question of how to optimize the structure of taxes and welfare programs to balance the two goals of "make as much stuff as possible" and "distribute the stuff as evenly as possible".

But, as I said, this means that we already have a policy lever to handle this question. Therefore when we come up with other problems for policy to solve - e.g. global warming - we shouldn't bring up objections like "well this hurts the poor more!". You use the carbon tax lever to hit the global warming target and the redistribution lever to hit the output/inequality target. If you don't do this you end up with a horrible confused mess that isn't good at hitting either target.

[kentonio]

I don't have any particular dislike of rich people, but I do object to wealth being the only measure by which we regulate peoples ability to live their lives. Just driving all the poor people off the roads would mean all the poor people don't get to travel much outside their home towns, which then contributes to a lack of social and economic mobility. It basically ghettoizes people. That's not acceptable to me.

[giblets]

But most fuel is used for commuting, not travel outside of their hometowns. Which could easily be done with trains, planes, and buses. If you think getting the poor to travel is so important you could even subsidize passenger trains and buses.

[kentonio]

It's a knockon effect. The mass growth of private cars had a huge impact on peoples mobility. It's also worth mentioning that planes are also at risk of moves to raise taxes on fuel.

[Kuciwalker]

I don't have any particular dislike of rich people

It's not about disliking rich people, it's about disliking the idea of rich people.

but I do object to wealth being the only measure by which we regulate peoples ability to live their lives.

And my point is that this thinking is confused. Wealth is just your claim on scarce resources. We tend to approximate wealth by adding up the dollar value of all your financial assets, etc., but that is just an approximation. To the degree that you want to allocate scarce resources by some mechanism other than money, it isn't accurate.

If preventing global warming requires that only 35% of people can drive, and driving is really important, then the 35% of people who get to drive will be wealthy regardless of how much money they have.

What you really object to is the allocation of wealth based on money; but we've already got a system for redistributing wealth from people with money to people without money. We should use that.

[kentonio]

It's not about disliking rich people, it's about disliking the idea of rich people.

Nope, I think it's a pretty useful system for driving peoples aspirations.

What you really object to is the allocation of wealth based on money; but we've already got a system for redistributing wealth from people with money to people without money. We should use that.

Nope, I object to that being the sole measure of how people are allowed to live, and believe that some things need to artificially controlled to prevent people being unable to change their circumstances due to the wealth of their parents or general upbringing. I don't have any problem at all with the rich being the only ones who can afford to fly off to exotic resorts to stay in expensive hotels, but I do have an issue with them being the only ones who can afford to drive on the roads at home. As with most things, its a matter of degrees.

[pchang]

Or we could allow people to only drive every 3rd day.......((ID number +date) % 3 = 0 means you get to drive that day)