Professor Mark J. Perry's Blog for Economics and Finance
Remember when Obama said that not one single American making under $250,000 would pay a single dime more in federal taxes? Well the new emission standards Obama wants will make the cars we all buy as much as $600 - $1,300 more expensive.
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
15 Comments:
Not sure if I'd "define" this as a tax really. What if I decide to buy a "previously enjoyed" vehicle as I am wont to do when I do buy a car?
Wait a minute!?!
Brilliant!! I invented a potential tax loophole for myself. Don't buy a new car, avoid the provisional surcharge/tax "built into" the cost of the vehicle and..and...and.
Time to take my medication now.
Any time the government has their hand in my pocket, it's a tax. You can call it anything you want: fee, surcharge, levy, toll, tariff, ...
If it walks like a duck ...... it's a duck
From The Foundry: Global Warming Bill Isn’t About Saving the Environment or Protecting the ConsumerPolicymakers made it quite clear consumers will be hurt by a cap and trade bill. They also made it clear that this isn’t an environmental issue. It’s strictly politics. Representatives Henry Waxman (D-CA) and Ed Markey (D-MA) modified their global warming cap and trade proposal to win support from skeptical congressmen, but when any policymakers introduced modifications to protect the consumer and American businesses, Members promptly voted the amendments down...
From Steven Milloy dated May of '07: Dying for Better Gas MileageThe unfortunate reality, however, is that the only practical way automakers can meet higher CAFE standards at present is by the rather low-tech method of reducing the weight of automobiles.
And lighter cars are deadlier cars.
The National Academy of Sciences concluded in 2001 that existing CAFE standards increased traffic deaths by 1,300 to 2,600 per year. A Harvard University/Brookings Institution study put the figure at between 2,200 and 3,900 deaths per year...
I recall 10 or 15 years ago when the feds required all states to reduce the allowable alcohol percent for drivers from .1 to .08 a significant part of the justification was it would save 47 deaths a year. At the time I felt the stat was contrived on the face of it considering the millions of people driving. But be that as it may it is interesting the control freaks in D.C. "care" about 47 humans but could give a rip about thousands.
The cap and trade bill as well as the "emission standards" are about two things a)more revenue for the government and b) control of the citizens. Realizing the agenda is much more important than a few thousand lives.
Out of curiousity, what are the driving accident and death rates like in western europe compared to the usa?
Same for australia.
Both places average much smaller cars.. it isn't the small cars that are deadly, it seems to be the disparity on the road between say a ford focus and a ford expedition...
My recommendation would be to tax petrol and use the tax for road repair and construction of energy plants (not general revenue).
(but I don't sense that's a popular view on this blog)
There are over 250 million passenger vehicles in the U.S.In the year 2001, the National Automobile Dealers Association conducted a study revealing the average age of vehicles in operation in the US. The study found that of vehicles in operation in the US, 38.3% were older than ten years, 22.3% were between seven and ten years old, 25.8% were between three and six years old and 13.5% were less than two years old. According to this study the majority of vehicles, 60.6%, of vehicles were older than seven years in 2001.[5] This relatively high age of automobiles in the US might be explained through increased quality and life expectancy of vehicles and a corresponding gradual decline in sales figures since 1998.[6]In the year 2006, 7,667,066 passengers cars were sold in the United States.
If we round to 8 million a year in sales, it would take 31.25 years to replace the existing U.S. fleet. This policy hamstrings the auto industry and all related industries, costs consumers a bundle but achieves very little in CO2 emissions.
Jim, how do I get some of that medication?
QT and Jim, just wait - soon they will be passing a tax on selling your old car if it has poor MPG, as they define it. They can't let you get away with free choice so easily!
Remember when people said Bush was taking away our freedoms because he was allowing wiretaps of conversations with terrorists over seas? Ahh, seems like the good old days compared to the freedoms we are losing now! Oh yeah, and we are still doing the wire taps . . .
As I keep saying, the Democrat party is about doing stuff that looks good, regardless of whether it will cause more harm than good.
Yes, anytime the government increases fees under the guise that it's for our own good, IT IS A TAX and whatever benefit the government says it was for was never attained! It's just another way for them to increase their power at the expense of our civil liberties. Remember in the '70's when the government under the environmentalist lobby banned DDT because it was harmful not just to people but the environment? Well time proved, yet again, that the liberals were wrong, and MILLIONS of people DIED of malaria, mainly in Africa. Now the government again wants to mandate not just what they THINK will save gas, save the environment (which it won't), but now this President and government have the ARROGANCE to dictate how business should be run. I think the time is now ripe again for a revolution in this country.
Movingeast,
My recommendation would be to tax petrol and use the tax for road repair and construction of energy plants (not general revenue).
(but I don't sense that's a popular view on this blog)If the goal is reducing emissions and dependence on foreign oil, a pigovian tax (gas tax) is the quickest way to achieve both. It would, however, require political courage.
Politicians prefer the nebulousness of cap and trade and excellent grandstanding opportunities with cries of "big business must pay for their pollution". The fact that CO2 is a gas that we exhale (ie. a non-toxic, non-pollutant) is beside the point. Politicians present themselves as public guardians and businesses inevitably pass the costs on to the consumers anyway or lay off workers. The actual goal is not materially achieved.
If CC is really a serious threat to all life on earth, one wonders why the most expedient method to reduce GHG's is not even on the table.
Comparisons to traffic fatalities in Europe may not be that useful since Europe has much smaller cars & trucks than the U.S. It is usually the disparity in size that causes death (ie. accident between a sub-compact car and a Hummer is more likely to result in serious injury to the occupants of the small car than a collision between 2 cars of similar size & weight).
Janet,
Nice to meet another conservative gal. Viva la revolution!
That would require the consideration that some sort of regulation would have to exist and that it has its own "Laffer's Curve".
The question is, how do you construct such a curve for regulation if it is indeed so complex?
Marko hit it right on the head. If you're going to force companies to make a certain kind of car, but you think that people might prefer to buy another just tax the car they want to buy to subsidize the ones they don't. Makes sense to me, everything is nice and equal. You guys need to realize that living here is like living in quicksand - the more you struggle to get out the faster you'll be buried.
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I think you need to buy a dictionary. Maybe it is bad policy, but taxes are used to fund government expenditures.
This is no different than the building codes in my house, which arn't taxes either.
Robert and Greg, you are generally right, but technically wrong. Nowadays, most taxes are levied in money, but historically there have been taxes levied in other forms, e.g labor.
It's probably best to say CAFE is indistinguishable from a tax - just as inflation "is" (has the same effect as) a regressive tax - it imposes a cost on the taxpayer in order to help government provide a "good or service" that it would otherwise have to pay for.
QT and Marko---I so apologize for a timely response and not sure if you'll end up reading this. But no matter...cause I'm still going to post.
QT---fortunately, I practice medicine (I really wish we generically in the medical fields could get rid of this word "practice"---I'm in the game and not just on the practice field) and so therefore can magically coerce my partners to prescribe wonderful elixirs and rather dangerous potions curiously sanctioned by the FDA and pharmaceutical company demi-gods who believe they know what's best for all of us here in the US.Yes...indeed those friendly yet busty drug reps that invade our office periodically are fountains of unbiased info. Did I answer your question??
Marko---you have an interesting perspective. I will therefore keep my car until I run it into the proverbial ground...then have it towed to Goodwill so that I can claim a charitable deduction upon its sorry remnants. This I believe will end up lowering my general tax bill.
BUT WAIT---thre's more!! Totally off topic but i calculated out this evening the effects of proposed initiatives to delete medical expense deductions upon my present salary and if things remain the same, I will end up paying over 10K out of pocket compared to last year.
Therefore, I will need to call a friend and have my psychotropic meds be titrated higher tout suite. QT---I'll keep you informed!
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