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And your argument is bad anyhow. What with the people who do not live in such dense populated areas? Why is heating reasonable, when it is possible to reinsulate houses in a way, that they don't need heating at all? And of course you can live in a huge old villa, which is luxury and needs a lot of heating. There is no reason at all to assume that heating in general can't be as much luxury as car driving. Therefore the first approach, to tax on environmental impact and compensate for regressivness is much better. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
So if you go by the former route, you will get better environment (compared to doing nothing) and less inequality. If you go by the latter route, but stop short of adequately compensating the poor who are regressively taxed, you get better environment but bigger inequality, which you will then have to redistribute your way out of.
In the ideal world, where the quid pro quo of the latter policy was clearly understood and accepted by all political actors, that would not be a problem. But in the real world, where we have to fight tooth and nail for any redistribution at all...
As for your counter-examples, there is no reason why car taxes cannot be tied to the location of the car through, for example, fees to enter or park in densely populated areas. Well, that and the fact that there is certainly a case to be made that population densities insufficient to support a rail line are insufficient, full stop.
Similarly, if one were to institute a tax on heating fuel - and an inheritance tax, a wealth tax and a progressive income tax to restore progressivity to the tax system - and use the proceeds to fund re-insulation of houses, then I would have no objection. But in the real world, what is usually proposed is simply heating fuel taxes, full stop, which is inherently regressive. Even worse, it hits tenants worse than home-owners, because the landlord has little financial incentive to improve the insulation (the tenant usually pays the heating bill, after all).
- Jake Friends come and go. Enemies accumulate.
And if living in the countryside would be insufficient, it would turn out faster so, with a fuel tax, compared with a car tax. A car tax hits more people, e.g. driving once a week for buying stuff you can't get locally than long range everyday drivers compared with a fuel tax.
And with regard to political feasability of some progressive countermeasure to regressivity of fuel tax, I would say that a group in the position to implement a tax should as well be in the position to implement a benefit. Either you have legislative majority or you have not. My favourite by-measure would be to pay a unconditional basic income of the fuel tax revenue. Of course still some relatively poor people, e.g. long range commuters will be hit, but in the end one wants those people who use more than the average to pay for what they are doing. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
I would point out, however, that such fuel-taxes will have to be Unionwide, whereas car taxes can be implemented locally: In geographically small countries, fuel taxes can be evaded by "fuel tourism" in much the same way wealth taxes can be evaded by Swiss bank accounts. Cars, on the other hand, can be taxed locally, because cars have to be registered locally in order to be driven legally.
As for the political feasibility of compensating vs. taxing; in theory you are right. And in theory, theory and practise are the same. But take note of the most recent tax downsizings in Denmark: Taxes were downsized for the rich and richer, and the part of the tax downsizing that was financed at all was financed by green taxes. Now, I have nothing against green taxes, but using the income from green taxes to pay for tax downsizings that mainly benefit rich fatcats, that I do have a problem with.
(In the Danish example, a median-income family got precisely zero net benefit from the tax downsizing scheme - I'll leave it as an exercise to the reader to extrapolate downwards in the income distribution.)
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