Gas taxes are again in fashion

From The Becker-Posner Blog: Gasoline Prices–Posner’s Comment the higher gas tax is again in fashion.

A Political Economy of Access: Infrastructure, Networks, Cities, and Institutions by David M. Levinson and David A. King
A Political Economy of Access: Infrastructure, Networks, Cities, and Institutions by David M. Levinson and David A. King

Respected economist again advocates higher gas taxes:

Posner writes “But better than a government-planned and -funded project would be, in my opinion, heavy gasoline taxes. They would give private industry strong incentives to discover good substitutes and also means for reducing carbon-dioxide emissions and indeed removing carbon dioxide from the atmosphere.”
Here in addition to instability in energy-producing countries (somehow justifying higher taxes, which will reduces those countries’ incomes, which is unlikely to increase stability), the global warming argument is identified.
Becker however cites the work of Resources for the Future (I believe referring to a study by Martin Wachs, formerly of UC Berkeley, now of Rand) Becker writes “Federal, state, and local governments of the U.S. combine to impose taxes on gasoline of about 60 cents per gallon. Studies by Resources for the Future suggest that this is more than adequate to cover all effects of pollution, aside perhaps from some larger estimates of the effects of gasoline consumption on greenhouse warming. The purpose of gasoline taxes is to cut consumption by raising gasoline prices to consumers, but the $1 increase in gasoline prices during the past year has cut gas consumption. These higher prices, if they stay, will cut gasoline usage much further as consumers have more time to adjust their behavior. If the optimal tax on gasoline was $1 when gasoline sold for $2, the effective tax is now $1.60: the 60 cents imposed by governments and the $1 increase due to market forces. So, if anything, this argument suggests that gasoline taxes be reduced rather than increased while prices are so high.”
(However Wachs has written a piece A Dozen Reasons for Raising Gasoline Taxes (PDF). An important reason is to help bring about better user charges, namely road pricing. )
Clearly there is uncertainty about the extent and cost and valuation of potential climate change. The fact that oil prices are now higher should decrease the calls for a gas tax, as the market is now accomplishing the ends a gas tax sets out to do. Yet, the market demand (expressed as the number of advocacy blog posts) for a gas tax apparently is rising as the price of gas rises.

War for oil vs. war against oil

I am still not clear why we entered the war in Iraq.
Many opponents of the war say it was for oil, but destroying oil fields doesn’t result in there being more oil anytime soon. Given that the price of oil has gone up (as have oil company profits), maybe it was a “war against oil”, but surely had that been the oil companies Machiavellian aim, that could have been achieved much easier (just bomb the oil fields).

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From the “The price of gas is high, let’s make it higher” deparment

An example of a recent line of reasoning … Bring On The $6 Gallon Of Gas / It would revolutionize America. It would make us all better humans. But could you handle it?
Another example from Andrew Sullivan
Or this from Thomas Friedman

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