The gas tax: beautiful in its simplicity

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There was a lot of talk about gas taxes in Canada in 2008, little of it very enlightening. One of the preferred takes by members of the MSM was how the Liberals’ Green Shift was “inexplicable”. Admittedly they were relying on an uncharismatic leader to explain it in a language that wasn’t his mother tongue. So why bother figuring it out for themselves?

Interestingly, Charles Krauthammer, a conservative contributing editor to the Weekly Standard who remains unconvinced that global warming is man made, makes the case for a gas tax here.

Why does he like it? In short, because it’s good for national security, America’s balance of payments, and the environment. But also because it is much more in line with free market thinking than, say, a highly regulated cap-and-trade system. Money quote:

“Yes, a high gas tax constitutes a very serious government intervention. But it has the virtue of simplicity. It is clean, adaptable, and easy to administer. Admittedly, it takes a massive external force to alter behavior and tastes. But given the national security and the economic need for more fuel efficiency, and given the leverage that environmental considerations will have on the incoming Democratic administration and Democratic Congress, that change in behavior and taste will occur one way or the other. Better a gas tax that activates free market mechanisms rather than regulation that causes cascading market distortions.

The net-zero gas tax not only obviates the need for government regulation. It obviates the need for government spending as well. Expensive gas creates the market for the fuel-efficient car without Washington having to pick winners and losers with massive government “investment” and arbitrary grants. No regulations, no mandates, no spending programs to prop up the production of green cars that consumer demand would not otherwise support. And if we find this transition going too quickly or too slowly, we can alter it with the simple expedient of altering the gas tax, rather than undertaking the enormously complicated review and rewriting of fuel-efficiency regulations.”