The Reverse Of A Carbon Tax

Jun 28 2013 @ 8:00am

Jodi Beggs criticizes recent efforts by Virginia and North Carolina lawmakers to levy a tax on hybrid cars to make up for their reduced contribution to gas taxes:

Economically speaking, both Virginia and North Carolina are saying that they want at least some of their residents to switch back from purchasing hybrid cars to purchasing regular gas guzzlers. The most frustrating part is that this makes perfect sense from a self-interest perspective – the state legislature certainly feels a lot more pain from having an increasing budget shortfall than it does from producing some more pollution that everyone else who doesn’t write stupid policy has to deal with. …

Here’s the problem, though – it’s one thing for a for-profit business or consumer to be self-interested and not do what is best for society unless it has the proper incentives to do so, but a main principle of government is that it is supposed to have a fiduciary duty to society and be immune to what would typically be thought of as profit pressures. In this way, both Virginia and North Carolina are failing – can’t you both just find something that imposes costs on society to tax instead?