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LaHood and Driving Taxes


Re your post, Kathryn, there is a good case to be made for taxing vehicle miles traveled rather than gasoline consumption. The strongest argument is that drivers will not change their behavior as much in the teeth of a tax on miles traveled as they will when faced with a gasoline tax (demand for the former is more inelastic, in economic parlance, than the former). The more a tax changes consumer behavior, the more social costs are associated with the tax. At least, that’s how economists look at it: An efficient tax is one that changes behavior the least.

That said, there is an even better reform — get rid of federal gasoline taxes altogether and send all road construction and maintenance programs back to the states. All the bridges to nowhere, all the Robert Byrd memorial thises and thats, all the corruption associated with log-rolling transportation earmarks in Congress . . . all goes away. Alas, not even the late, great President George W. Bush dared entertain such an idea, and with all roads to recovery thought to come out of some shovel-ready highway somewhere, LaHood most certainly won’t go there. 


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