We’ve talked about the plan of increasing taxes on gasoline and then reducing payroll taxes so that workers have an incentive to use that extra income to adjust their transportation decisions so they can keep some of that extra income.
I see a few problems with this method of kicking up the search and implementation of non-gasoline fuels, but I’ll focus on only one. This plan gives workers too much leeway with their extra income. The workers could use this extra income to fund other forms of transportation fuels; that’s one option. However, given the state of the other options, it seems more likely that workers will go with gasoline because it’s easier than hurdles of the up-and-coming fuels. Some alternative fuels require buying a new vehicle or upgrading an older vehicle to run on a new fuel would likely more than offset the tax break. And, because there are so few fueling stations, workers would have to overcome psychological hurdles too. Workers are likely to either spend their days worrying about where to find the new fueling stations or fretting about whether their car will be able cover all the miles of their commutes on a single charge. Given these psychological hurdles and Americans’ proclivity for the status quo, the best bet is that this extra income will go to purchasing the higher-taxed gasoline. With these psychological hurdles, it seems like if we really want to find fuels other than gasoline, this extra income needs some steering.
By dropping the second part of this plan, the extra income from the gas tax goes to the government. Now I might be naïve, or a socialist, or think like those soft Europeans, but I think by giving this tax revenue to the government and requiring this income actually fund fuels besides gasoline we could get to fuels besides gasoline faster. This money would infuse the emerging markets with the capital they need to build their physical infrastructures or brainwash us (Americans) into believing these alternative fuels are fun, easy to use, and potentially not as bad for the planet. Now, there are likely decreases in other areas of government income because this tax will affect how consumers spend their money. So the government may receive fewer dollars from sales taxes because we may have to cut back on buying things like the latest and greatest iProduct. But remember, we came from a generation without cellphones or computers and somehow they survived long enough to bring us into existence. Essentially, if we want fuels other than gasoline, we’re going to have to pay somehow. If we’re too set in our ways to change, even for a cause we claim to support, it makes sense to have someone (Uncle Sam) twist our arms a little to get there.
This might sound like an assault on freedom of choice or, even deeper, on free will, but people don’t have the best track record exercising those powers to benefit others. Enron. Another example is a psychological experiment I read about.
An actor is hooked up to a machine. The subject believes the machine gives the person a shock (the subject doesn’t know the person hooked up to the machine is an actor). The psychologist performing the test tells the subject to shock the actor whenever the actor answers a question incorrectly. The psychologist tells the subject to increase the strength of the shock with each incorrect answer. In this experiment, the psychologist would ask the actor questions and the actor would answer the questions incorrectly to the point where the subject believed he or she was delivering a lethal shock to the actor. Nearly all of the subjects delivered this shock. The psychologist would simply tell the subject to deliver the shock. If the subject questioned the psychologist, the psychologist would respond by telling the subject he had to follow through with what the experiment required. The subjects were interviewed after the experiment and were asked why they went along with killing someone because they were told to, not forced or coerced, but simply told to. Most said because it was easier to follow directions and the psychologist was an authoritative figure.
This could be an analogy for our relationship with gasoline. No one is forcing us to buy it, but we keep buying anyway because it’s easy; it’s what the carmakers tell us to buy; and the government rationalizes the choice economically with subsidies.
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