Welfare Wagons

In a typical bit of masterful Jenkinsian prose, he lays out the case for raising fuel taxes, which I happen to agree with. However, he scolds “politicians” for not being courageous while at the same time not endorsing any such increase himself. This theme appears over and over in WSJ editorial opinions.

Even if you believe saving gasoline is a holy cause, subsidizing electric cars simply is not a substitute for politicians finding the courage to jack up gas prices. Think about it this way: You can double the fuel efficiency of any car by putting a second person in it. You can increase its fuel efficiency to infinity by refraining from frivolous trips.

These are the incentives that flow from a higher gas price. Exactly the opposite incentives flow from mandatory investment in higher-mileage vehicles. You paid a lot for a car that costs very little to operate—so why not operate it? Why bother to car pool? Why not drive across town for a jar of mayonnaise?

Welfare Wagons, WSJ, May 12, 2010

Use taxes are the best way to reflect the externalized costs of an activity.  E.g. in this example taxes on motor fuel. Fuel taxes have been falling for years, this makes the cost of driving less and less — which, as Jenkins points out, tends to make people drive more and more. There are a couple of reasons the tax is falling, one is the simply that taxes are levied on a per gallon basis and the amounts rarely change (Arizona has levied the same tax for around 20 years), this means the real price of the tax is continuously falling. for 20 years. Another is the tendency for vehicles to become more efficient over time, resulting in a lower tax per mile traveled.