Trump proposes increasing gasoline tax by 25 cents/gallon

[schlaufuchs]

The problem is that a gasoline tax increase is such a dumb way to accomplish the goal of fewer people driving too much. If you want to do that the heavy lifting is going to come from redesigning the physical layout of the country to be less reliant on individual driving for transportation. This will not be easy but I think it would be a much better move than just increasing the gas tax. Invest in pedestrian space, mass transit, all that stuff.

Or tax purchases of big cars. Or provide tax breaks/subsidies/rebates for fuel efficient, compact, or hybrid cars.

 

[Lexicus]

So? What funds your projects? Inflation? Horrible idea. Talk about regressive.

This is just silly. All spending is "funded by" inflation. And it's not remotely regressive to have walkable cities that aren't clogged with pollution-spewing cars. Poor people are typically affected far less by inflation than by the real deficits (unemployment, people without access to health care, etc) we maintain in a misguided attempt to avoid inflation. One of those real deficits is of course the generally horrible state of our infrastructure and the fact that our cities are almost intentionally designed to produce maximum waste and pollution.

Or tax purchases of big cars. Or provide tax breaks/subsidies/rebates for fuel efficient, compact, or hybrid cars.

No, I'm way beyond this. We need policy that totally discourages the very existence of automobiles designed to hold a maximum of 5 or fewer people.

 

[El_Machinae]

Dude. You're so wrong. You're tackling a regressive problem with a regressive tax. Outside of outright mugging, I cannot think of a more damaging tax than inflation.

 

[Lexicus]

Outside of outright mugging, I cannot think of a more damaging tax than inflation.

To name one, unemployment is objectively more damaging, by any metric you want to choose, than inflation. It isn't even close. We can name lots more if you want to go there.

http://bilbo.economicoutlook.net/blog/?p=10554

First, unemployment is always a greater problem than inflation in almost any dimension you want to define it and which are calibrated by metrics that different ideological persuasions agree on – such as lost GDP. There is nothing ideological in the statement that the losses from unemployment dwarf those associated with inflation. Even mainstream textbooks struggle to come up with large estimates of the costs of inflation that they itemise.

Even our favourite sham-book – Mankiw’s Principles of Economics – notes that “inflation does not in itself reduce people’s purchasing power”. He lists “shoe leather costs” (walking to the bank more often); “menu costs” (changing catalogues); “confusion and inconvenience” (but “difficult to judge” how severe); “inflation-induced tax distortions” (mainly impacting on returns to saving); and “arbitrary redistributions of wealth” (if inflation suddenly changes) but the estimated losses arising are nothing like those attributed to persistent unemployment.

There has been no credible study that shows that overall the losses from these “costs” amount to millions of dollars of foregone output every day. There is ample evidence that mass unemployment results in huge permanent losses every day in foregone output and income.

And then if you study the broader literature (health, mental health, sociology, crime, family studies etc) you realise that the macroeconomic losses from unemployment are just the tip of the iceberg. The personal, family and community losses are very large and persist across generations.

 

[warpus]

Gas in the U.S. is sooooo cheap, and you guys are lacking soo much infrastructure (new, upgrades, etc.) it seems, this actually seems like a really good idea. But I did not look through the fine print

 

[schlaufuchs]

Gas in the U.S. is sooooo cheap, and you guys are lacking soo much infrastructure (new, upgrades, etc.) it seems, this actually seems like a really good idea. But I did not look through the fine print

The fine print is that owning a car is a prerequisite for living in the US outside a tiny handful of cities and metro areas (namely: New York, Chicago, Boston, DC, the Bay Area, and Portland) which have passable public transit, and that owning a car (even before gas) is fairly expensive, particularly when you're poor and forced to buy a car that is very prone to breakdowns. The tax is not a great idea because it harms those people needlessly. If the object is to discourage driving, or buying/operating wasteful, unnecessary, or ecologically (or infrastructurally) damaging vehicles, there are better ways of doing so directly. Or alternatively, of encouraging people broadly to switch to the kinds of cars you want your citizens driving.

Oh, and I forgot to mention that the "passable public transit" often exclusively services the more affluent parts of the metro area in question. The El doesn't go to South and Southwest Chicago, broadly speaking, and for those parts which it does go to, even the residents of those regions advise against using it. BART doesn't go to East Berkeley, many parts of East Oakland and the extreme West of Oakland. Both it and Caltrain don't go to West SF. This is of course ignoring that SF itself is too expensive for most people under 6-figure incomes to live in, and so people are moving further East into Richmond, Concord, Dublin, Pittsburgh, Antioch, etc. which don't fall into the "passable public transit" regions.

When I lived in Santa Cruz, there was a day where I had to go to the DMV to get a copy of my driving record for a job. The nearest DMV was the next town over. Neither I, nor anybody else I knew owned a car, so I took the bus (only public transit available). Ordinarily, it'd be a 30 minute drive round-trip. It took me over 2 hours to make it there and back by bus. Cars are a necessity.

 

[Farm Boy]

It's hard to talk about it with people who live around those areas though. They just don't get it, and if they start to, they seem to have a tendency to write you off as a problem to be fixed. Cash for clunkers hurt, but not if you were fortunate enough in cash reserves or location.

 

[El_Machinae]

To name one, unemployment is objectively more damaging, by any metric you want to choose, than inflation. It isn't even close.

How would you build new infrastructure by unemploying people?

I will have to make a thread. Inflation as a tax is so astoundingly bad.

 

[Lexicus]

How would you build new infrastructure by unemploying people?

I will have to make a thread. Inflation as a tax is so astoundingly bad.

Clearly something is being lost in translation. Unemployment and inflation are typically presented as a trade-off. Inflation is frequently invoked to explain why we can't have federal deficit spending to address [insert social problem here]. In virtually all cases these social problems are waaaaaaaay more damaging than inflation, or at least, than the kind of inflation likely to result from deficit spending to address them.

 

[El_Machinae]

Yeah. We're miscommunicating. I have zero problem with printing dollars to bring untappd production to bear. Ostensibly, we could target zero inflation because we are only fighting deflation. But deflation is so horrible, that having a target is better. And bringing inefficient labor online using inflation can be less expensive overall than failing to bring it online. Keep in mind, I am talking in real terms, not fiat. We use inflation to fight a social ill, unemployment. But it's terrifically regressive if you get it wrong. Similarly, the minimum wage is designed to raise wages and reduce unemployment, but any errors on that front are heavily born by the poor. It's a tool in the tool kit for political reasons, a tax by another name. A regressive one. But when I ask who will fund your infrastructure, I am speaking in real terms. I will have to create a thread. Later tonight.

I became increasingly boggled with your replies. I cannot imagine how you can build infrastructure by increasing unemployment. I realize now that you are discussing inflation as a hedge against unemployment. It's not really the question I was asking.

 

[Lexicus]

But when I ask who will fund your infrastructure, I am speaking in real terms. I will have to create a thread.

My preference would be for the rich to fund it (surprise!). There are a variety of methods by which we could do this.

 

[Berzerker]

how does the minimum wage increase employment?

 

[Lexicus]

how does the minimum wage increase employment?

By increasing aggregate demand

 

[Narz]

Taxing fuel is becoming outdated because of efficiencies and electric cars.

Wut? How many percent of people have electric cars like .01%? Car efficency is terrible. I think cars got better gas milage in the early 80s than today

 

[schlaufuchs]

Wut? How many percent of people have electric cars like .01%? Car efficency is terrible.

1%, actually.

 

[Narz]

The fine print is that owning a car is a prerequisite for living in the US outside a tiny handful of cities and metro areas (namely: New York, Chicago, Boston, DC, the Bay Area, and Portland) which have passable public transit, and that owning a car (even before gas) is fairly expensive, particularly when you're poor and forced to buy a car that is very prone to breakdowns. The tax is not a great idea because it harms those people needlessly. If the object is to discourage driving, or buying/operating wasteful, unnecessary, or ecologically (or infrastructurally) damaging vehicles, there are better ways of doing so directly. Or alternatively, of encouraging people broadly to switch to the kinds of cars you want your citizens driving.

Oh, and I forgot to mention that the "passable public transit" often exclusively services the more affluent parts of the metro area in question. The El doesn't go to South and Southwest Chicago, broadly speaking, and for those parts which it does go to, even the residents of those regions advise against using it. BART doesn't go to East Berkeley, many parts of East Oakland and the extreme West of Oakland. Both it and Caltrain don't go to West SF. This is of course ignoring that SF itself is too expensive for most people under 6-figure incomes to live in, and so people are moving further East into Richmond, Concord, Dublin, Pittsburgh, Antioch, etc. which don't fall into the "passable public transit" regions.

When I lived in Santa Cruz, there was a day where I had to go to the DMV to get a copy of my driving record for a job. The nearest DMV was the next town over. Neither I, nor anybody else I knew owned a car, so I took the bus (only public transit available). Ordinarily, it'd be a 30 minute drive round-trip. It took me over 2 hours to make it there and back by bus. Cars are a necessity.

Unfortunately the way most cities and towns are setup mix car ownership almost necessary but if you're truly motivated you can find ways around this. I have an electric bike which I use daily, if I have to go far I'll take a Uber. Obviously living with the kids, extreme weather ,out in the countryside makes creative solutions harder. Also most people live pretty isolated, there's a intentional community in rural Illinois where they have I believe only about 15 or 20 cars for a hundred people but of course to have that work you really have to trust the people in your community. There's really no reason why every single person should have to own their own car, it's so inefficient

 

[Narz]

1%, actually.

1% of people have cars that don't take gasoline?

 

[El_Machinae]

how does the minimum wage increase employment?

It's a needle that has to be carefully threaded, it can certainly be done wrong.

 

[schlaufuchs]

1% of people have cars that don't take gasoline?

1% of American cars are powered entirely by electricity, yes. 0.8% for the world, but the share is increasing rather rapidly. Electric car ownership has grown roughly 1100% globally since 2013. Electric Car ownership has increased by 11,500% in China since 2011.

 

[Narz]

1% of American cars are powered entirely by electricity, yes. 0.8% for the world, but the share is increasing rather rapidly. Electric car ownership has grown roughly 1100% globally since 2013. Electric Car ownership has increased by 11,500% in China since 2011.

Hmm, I'm surprised