Comments on: Is the gasoline tax regressive? http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/ The Latest on Climate Science, Solutions, and Politics Sat, 21 Nov 2009 15:55:04 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Rod http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-76672 Rod Tue, 16 Jun 2009 20:04:00 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-76672 Are you misquoting the 2003 Dec study in California. Here's what I get from it "The very poor do not own cars, and do not buy gasoline, so a tax on gasoline would not hurt the poorest families. The next income bracket includes working low-income families who tend to spend a relatively high fraction of income on gasoline. They would bear the brunt of a gas tax, while successive income brackets spend successively lower fractions of income on gas. Thus the gas tax is not regressive at the very poorest levels, but it is regressive across most of the rest of the income spectrum." Doesn't that say it's regressive? Are you misquoting the 2003 Dec study in California.

Here’s what I get from it

“The very poor do not
own cars, and do not buy gasoline, so a tax on gasoline would not hurt the poorest
families. The next income bracket includes working low-income families who tend to
spend a relatively high fraction of income on gasoline. They would bear the brunt of a
gas tax, while successive income brackets spend successively lower fractions of income
on gas. Thus the gas tax is not regressive at the very poorest levels, but it is regressive
across most of the rest of the income spectrum.”

Doesn’t that say it’s regressive?

]]> By: Paul K http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11063 Paul K Thu, 17 Apr 2008 12:21:58 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11063 Earl Killian, I completely agree there needs to be a reordering of subsidy priorities especially in the areas of transmission and grid development. Earl Killian,
I completely agree there needs to be a reordering of subsidy priorities especially in the areas of transmission and grid development.

]]> By: Rich http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11056 Rich Thu, 17 Apr 2008 01:24:24 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11056 Paul K's first post gets this just right: <blockquote>My concern is for working families at or just below median income. It is clear from your chart that they are the hardest hit by gas taxes. In fact the broad middle class - decile 3 thru 7 is negatively impacted compared to both the poor and the wealthy. You also ignore the basis for judging taxes regressive which is the theory of the diminishing utility of the dollar. A dollar is much more valuable to a person who has 1,000 than to one who has a million.</blockquote> It's particularly ironic to hear "they don't own cars and walk" being given as a reason why the tax isn't regressive -- might they not be doing these things if they weren't priced out because the costs are already to high relative to their other needs (shelter, food, etc.). Raising gas taxes is regressive by putting living the way the upper deciles do that much further out of reach for the poorest, and it puts even more of a squeeze on those who may not pay more as an absolute percentage of their income than those who are richer but for whom each dollar is more precious because of their scarcity (those at or just below the median). Regressive. Paul K’s first post gets this just right:

My concern is for working families at or just below median income. It is clear from your chart that they are the hardest hit by gas taxes. In fact the broad middle class – decile 3 thru 7 is negatively impacted compared to both the poor and the wealthy. You also ignore the basis for judging taxes regressive which is the theory of the diminishing utility of the dollar. A dollar is much more valuable to a person who has 1,000 than to one who has a million.

It’s particularly ironic to hear “they don’t own cars and walk” being given as a reason why the tax isn’t regressive — might they not be doing these things if they weren’t priced out because the costs are already to high relative to their other needs (shelter, food, etc.).

Raising gas taxes is regressive by putting living the way the upper deciles do that much further out of reach for the poorest, and it puts even more of a squeeze on those who may not pay more as an absolute percentage of their income than those who are richer but for whom each dollar is more precious because of their scarcity (those at or just below the median).

Regressive.

]]> By: Earl Killian http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11030 Earl Killian Wed, 16 Apr 2008 20:25:27 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11030 Paul K, yes there are small carbon taxes today, but there are also carbon subsidies. http://www.earthtrack.net/earthtrack/library/SubsidyReformOptions.pdf I cannot vouch for the accuracy of the above, but it wouldn't surprise me if true. It cites an estimate of $49 to $100 billion dollars of energy subsidies in 2006. Most of these were for non-renewables. Imagine a world in which those dollars were directed at renewables instead! Cheney's friends sure got a high return on investment for their subsidies of the Bush election campaign. Oil and gas got 52.4% Coal got 15% Total fossil was 66.2% Nuclear got 12.4% Ethanol got 7.6% Other renewables got 7.5% Conservation got 2.1% Other got 4.2% How backwards is that! Conservation should have gotten 50%. That would have made a larger difference in all of the others than the money they got. Paul K, yes there are small carbon taxes today, but there are also carbon subsidies.
http://www.earthtrack.net/ earthtrack/ library/ SubsidyReformOptions.pdf
I cannot vouch for the accuracy of the above, but it wouldn’t surprise me if true.

It cites an estimate of $49 to $100 billion dollars of energy subsidies in 2006. Most of these were for non-renewables. Imagine a world in which those dollars were directed at renewables instead!

Cheney’s friends sure got a high return on investment for their subsidies of the Bush election campaign.

Oil and gas got 52.4%
Coal got 15%
Total fossil was 66.2%
Nuclear got 12.4%
Ethanol got 7.6%
Other renewables got 7.5%
Conservation got 2.1%
Other got 4.2%

How backwards is that! Conservation should have gotten 50%. That would have made a larger difference in all of the others than the money they got.

]]> By: Earl Killian http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11027 Earl Killian Wed, 16 Apr 2008 20:14:26 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11027 Robert, that's always the trouble: such pitches don't reach the right audience. Only corporations have the money to do that. Another movement you might find interesting are the Compactors: http://groups.yahoo.com/group/thecompact/ http://www.washingtonpost.com/wp-dyn/content/article/2006/12/17/AR2006121701122.html Robert, that’s always the trouble: such pitches don’t reach the right audience. Only corporations have the money to do that. Another movement you might find interesting are the Compactors:
http://groups.yahoo.com/group/thecompact/
http://www.washingtonpost.com/ wp-dyn/ content/ article/ 2006/ 12/ 17/ AR2006121701122.html

]]> By: Robert http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11005 Robert Wed, 16 Apr 2008 08:53:41 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11005 earl - yes, I watched http://www.storyofstuff.com/ when it was posted on http://www.energybulletin.net/ a few weeks ago. I tried showing it to other members of my family who are fully signed up members of the Church of Consumerism (unlike me, who detests the whole concept). They refused to watch it. earl – yes, I watched http://www.storyofstuff.com/ when it was posted on http://www.energybulletin.net/ a few weeks ago. I tried showing it to other members of my family who are fully signed up members of the Church of Consumerism (unlike me, who detests the whole concept). They refused to watch it.

]]> By: Robert http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11004 Robert Wed, 16 Apr 2008 08:50:48 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-11004 Steve - exactly. Only it's worse than that. If you tax tobacco heavily you really do kill off demand. If you tax fossil fuel it just makes it a bit cheaper and that bit easier for someone somewhere else on the planet to afford, so it gets converted to CO2 anyway. And even if you did somehow dampen demand globally, unless there is a plan to ultimately leave a proportion of the resource in the ground it's all a waste of time anyway. Steve – exactly. Only it’s worse than that. If you tax tobacco heavily you really do kill off demand. If you tax fossil fuel it just makes it a bit cheaper and that bit easier for someone somewhere else on the planet to afford, so it gets converted to CO2 anyway. And even if you did somehow dampen demand globally, unless there is a plan to ultimately leave a proportion of the resource in the ground it’s all a waste of time anyway.

]]> By: Steve http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-10999 Steve Wed, 16 Apr 2008 04:04:04 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-10999 We can debate minor changes to taxes all day long, but until Americans can stomach punitive taxation, there's point to thinking that we can be taxed to change our behaviors. We can barely get through increases in tobacco taxes, and that only effects 25% of the population. I don't think we'll ever see punitive taxation for waste in this country, at least not with the current prejudices Americans have towards taxes. We can't even stomach to tax the obscenely wealthy a decent amount because we hold out the faintest hope that one day we'll too be that rich. On a similar note, my favorite thing about these supposed flat taxes is that are based on the percentages that many people pay, after giving enormous sums to charity. Give them the flat tax, and watch the charity dry up! We can debate minor changes to taxes all day long, but until Americans can stomach punitive taxation, there’s point to thinking that we can be taxed to change our behaviors. We can barely get through increases in tobacco taxes, and that only effects 25% of the population. I don’t think we’ll ever see punitive taxation for waste in this country, at least not with the current prejudices Americans have towards taxes. We can’t even stomach to tax the obscenely wealthy a decent amount because we hold out the faintest hope that one day we’ll too be that rich. On a similar note, my favorite thing about these supposed flat taxes is that are based on the percentages that many people pay, after giving enormous sums to charity. Give them the flat tax, and watch the charity dry up!

]]> By: Robert http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-10997 Robert Wed, 16 Apr 2008 00:53:39 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-10997 Paul - I think high tax on vehicle fuels in the EU zone during the many decades when oil was cheap has made us use it more efficiently. We have generally smaller, more efficient engines and a more compact infrastructure. However, we don't tax other fuels in the same way (marine diesel, aviation fuel, agricultural fuel, domestic heating, electricity). This past strategy was to help our our balance of payments and is paying dividends now, but overall is not really making any difference to emissions. Also, in the UK traffic is limited mainly by congestion, which just shows how much we value petrol! The bottom line is that there is only so much crude oil in the world and it can only be produced at a limited rate, probably never exceeding 100 mbopd max. It will all get burnt as fast as it can be produced. As far as climate change goes it makes no difference who does it. Paul – I think high tax on vehicle fuels in the EU zone during the many decades when oil was cheap has made us use it more efficiently. We have generally smaller, more efficient engines and a more compact infrastructure. However, we don’t tax other fuels in the same way (marine diesel, aviation fuel, agricultural fuel, domestic heating, electricity). This past strategy was to help our our balance of payments and is paying dividends now, but overall is not really making any difference to emissions. Also, in the UK traffic is limited mainly by congestion, which just shows how much we value petrol!

The bottom line is that there is only so much crude oil in the world and it can only be produced at a limited rate, probably never exceeding 100 mbopd max. It will all get burnt as fast as it can be produced. As far as climate change goes it makes no difference who does it.

]]> By: Paul K http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-10996 Paul K Tue, 15 Apr 2008 23:19:34 +0000 http://climateprogress.org/2008/04/15/is-the-gasoline-tax-regressive/#comment-10996 This thread illustrates that those who advocate carbon taxes sometimes forget we already have them. They are quite high in some places and as Robert says they are ineffective in climate terms. I thought it was agreed that cap & trade for and regulation of CO2 emissions is the way to achieve the desired carbon price. The purpose of all taxes first and foremost is to bring revenue to the government. Taxes can also be used to punish behavior. Tax waste, not work is a good working motto. This thread illustrates that those who advocate carbon taxes sometimes forget we already have them. They are quite high in some places and as Robert says they are ineffective in climate terms. I thought it was agreed that cap & trade for and regulation of CO2 emissions is the way to achieve the desired carbon price. The purpose of all taxes first and foremost is to bring revenue to the government. Taxes can also be used to punish behavior. Tax waste, not work is a good working motto.

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