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Actually fees for entering a zone are something different, if the zone is not too big.

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 Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 03:57:53 PM EST
[ Parent ]
Yes, on the basis of environmental concerns, a fuel tax is superior to a car tax. No argument from me on that. I would much prefer to shift taxes from cars to fuel on an environmental basis. (Let's leave aside other externalities of a car such as congestion, which may justify taxing big cars purely because they are big.)

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.)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat May 31st, 2008 at 03:54:51 AM EST
[ Parent ]