Thursday, April 28, 2005

The Freebate

Ezra Klein thinks there's a better incentive for oil conservation than increasing gasoline taxes.
If the government wants to do something to reduce our oil usage, start by
slapping a serious feebate on auto purchases. Heavy cars and gas guzzlers get a
$3,000 tax tacked onto the price, and hybrids and economy cars get a $3,000
rebate on theirs. Detroit gets a fat sack of money to move quickly and smoothly
into the hybrid business, folks see the savings up front and thus make more
energy conscious car decisions, and we use way less fuel. No one, save those who
need huge cars for their business, is hurt by circumstances outside their
control. But even they'll only be temporarily penalized as the market will beg
for fuel efficient trucks and SUVs (like the Ford Hybrid), and automakers will
race to place them in showrooms.

I think Klein is right when he says a gasoline tax is regressive, disproportionately hurting poor and rural drivers. Taxing NEW gas guzzling vehicles up front makes more sense to me.

1 comment:

Anonymous said...

I don't think that the gas tax disproportionately hurts the rural. In the good old days, people chose jobs close to their homes or moved their homes close to their jobs. A good many rural persons choose rural lifestyles because they want them and not out of convenience. It is their choice to live far from necessities and they should pay for that luxury just as an urban single professional should pay for driving a Lincoln Navigator around for no real reason other than luxury.