In Europe, fuel taxes are high. In Turkey, taxes are high but also the income is much lower.
As a result, in EU the cars tend to be much more smaller and economical than those in the USA. In Turkey, the cars are like the cars in EU but the engines are much less powerful and fuel economy is everything. In Turkey, the car that the average Joe would buy will have 1.0 to 1.6 engine. Anything larger is reserved for the rich.
However I would like to note that, not only the fuel taxes are high but also the car taxes are high. In fact, the taxes in Turkey are so high on the powerful and expensive cars that it started catching World Wide attention[0].
But I would be careful on overtaxing. In Turkey's case, cars are so expensive that it's like buying a house. People take very long term loans to buy these things, which greatly reduces the disposable income and the life quality. On the flip side, cars value don't depreciate as quickly as in the USA or EU. Cars in Turkey tend to be well maintained and very few clunkers would be on the road(unlike Eastern Europe) and once you get a car, you can actually upgrade it after few years much easily since the old one will hold it's value pretty well.
As a result, from environmental and safety perspective taxing high works but it comes at a great cost of life quality. I would prefer the EU approach. Taxes are still high but not excessive and goals of reducing emissions are achieved through regulation instead of tax pressure.
I agree with this policy entirely, singapore has similar high taxes on cars. It is possible to build cities, and countries, in such a way that cars are mostly unnecessary. In a pedestrian first design, with bikes and public transportation, you do not need a car. Cars are dangerous (to pedestrians, and drivers and other drivers), environmentally harmful, wasteful, noisy things. Outside of some rural areas, and businesses, cars are not necessary, and should not be necessary day to day for 95%+ of people. Even with Buses a bus moves many more people more efficiently than a car. Autonomous trolleys, trains, buses are an easier problem than cars since you can have set routes. Electtric buses exist. Its really unfortunate so many societies are set up around the rich and cars.
It's horrible for cars, electronics and Alcohol. The base model iPhone 13 Pro is 1850$ in Turkey(the min. salary is 330$).
There's this thing called ÖTV, or "excise tax" which is applied to everything that is not basic biological need, essentially.
It's not just very high(%50 for the cheapest and least powerful cars and goes to a few hundred percent for the luxury ones) but also it is applied before VAT, so you pay VAT on the tax too.
Oh, maybe you can just buy stuff from abroad, right? Nope, very hard to import cars. Phones are required to be registered to you passport or the carriers would block the IMEI after few months and you guessed it right the registration fee is high(300$) and you can do it once veery 2 years. Maybe you can bring alcohol at least? Nope, max 2 litres per passenger allowed and it is again match to you passport.
Sin taxes (those on alcohol, cigarettes, gambling, etc) also hit low income people harder. Yet, we still raise them because the positive effects on society outweigh the consequences.
We want people to find ways to reduce their fuel consumption, just as we want them to stop smoking. It's painful, but necessary, because the consequences of inaction are so high.
Assuming that you don’t have a problem, you can always curb your drinking.
You still have to get to work. Many jobs, especially low income ones, will always have to remain in-person. In many places, infrastructure is already too far built out as sparse for public transport to be feasible for a very long time.
It’s easy to say “just take the hit” if you’re not walking in their shoes.
EU has a min excise tax on gasoline of 0.359 euro per 1L, before VAT ($1.6 per gallon). Most countries have it way higher (Germany : 0.6545€, or ~ 0.78€ after VAT). Higher fuel taxes should incentivize public transport, smaller/more efficient engines, etc.
There's a catch though: fuel taxes in Europe are important part of government's tax income. In my country it is like 10% of all taxes collected. Now, if everyone switches to electric vehicles this income source will dry out. Governments will have to replace it with something, so my guess is, they will at some point impose similar taxes on electricity.
In the US that needs to come with policy though. We have woefully inadequate public transit here, save for outlier metroplexes like New York. I would get laughed out of the room if I suggested taking the bus to the grocery store here.
> We have woefully inadequate public transit here, save for outlier metroplexes like New York.
Yep, and the only areas that have good public transit within the USA also happen to be very expensive... Something the working class poor and lower middle class simply cannot afford to even live near.
We had similar discussions in Germany on taxes on any CO2 emissions. There were proposals of redistributing some of the earnings to people with very low emissions, a bit similar to negative income tax rates in concept. Sadly never really went anywhere.
"We find that a carbon tax is inherently progressive, narrowing the income gap between rich and poor households. Beyond that, we find that it can potentially raise real incomes of low-income households."
That's just creating a poverty trap. Sure you can use math and do a phased in/out credit based on income but that just replaces a welfare cliff with a welfare "steep grade". Unless the credit is so generously applied as to defeat the point of the price hike you're still making the metaphorical gravity well of poverty deeper.
Edit: Did I say something mathematically incorrect or is it just inconvenient?
Take more money from poor people and then give it back at the end of the year - after paying the salary of all the new bureaucrats you had to hire. Great idea.
With the key added piece that you're trying to disincentivize carbon emissions in the process. I'm much more worried about the risks of the climate crisis than I am whether a few extra bureaucrats are hired.
Gas tax already exists, as does the earned income tax credit. Doesn’t take any new bureaucrats to change the numbers, although it will perhaps force some of them to get off their ass and modify some forms.
It would actually reduce inequalities because the revenues of the tax is redistributed directly to every individual. Since rich household polluting more than the poors, the 7 lowest deciles should actually be better off.
Yes it would and also inflation. Goods would cost more which would be another whammy. We should boost the tax credits for new EV purchases. And maybe extend to your first used EV purchase too.
That's the point. It exempts the poors who live in a shoebox apartment and take the bus and crushes the ones who are living far from their job and slogging out a crazy commute.
I doubt a decently sized gas tax (a few cents a gallon) would "crush" those who are commuting from afar.
Compared to the inflation already present for years in healthcare, housing/rent and college - all things with double digits for over a decade - the cost of gas rising a dime or two a gallon wouldn't even be noticed with the fluctuation of gas prices as is.
It won't be a few cents because few cents/gal isn't going to get the behavior change that is the point of the tax.
The fundamental issue here is that you need to take what a lot of people currently see as their best option (driving an ICE car) and make that sufficiently worse so that the next best option is the one tons of people choose.
Anything that gets the behavior change will necessarily screw a lot of people.
so? I say this to point out that if they're doing something that is to be deprecated there's nothing wrong with disincentivizing it, so long as we keep helping them get their needs met or towards self sufficiency.
For example nothing wrong with doubling tax on gas if we also improve public transit.
My main point is that regressive, nor disincentivizing the poor are wrong things to do if they're causing issues for society.
You could do the same thing about cigarettes and cheeseburgers too. The problem is that it’s inherently a regressive approach where the brunt is borne by the lowest income classes.
Cigarettes is a great example where there are highly taxed in some countries, so the US has a population of foreign experiments that the US can study to see the effects on the poor.
In New Zealand a pack of 20 costs about NZD36. Minimum wage is NZD20 per hour here.
Or adjusting to match median per capita incomes, that is about USD40 for a pack.
Edit: Disclaimer: when you are old enough to have close friends with smoking related cancers and emphysema etcetera, using dollars to represent the future cost to yourself seems more reasonable. It also breaks the social dynamic of handing cigarettes around and getting others addicted - when a single cigarette is expensive to you, you don’t just offer them to others.
EV are still susceptible to accidents (the way they're driven 'round here, I might even say more susceptible), but pollution from ICE also reduces lifetimes of people who have to breathe it in.
true, less people able to afford a Tesla on the roads, maybe we can build a nice walking lane with the proceeds so the good folks doing the gardening at the presidio can make it to work.
When Macron tried doing that in France pre-covid, people went on streets ("yellow vests"). 50€ more on fuel each month is a lot of money for many people who have to commute to work many kms from small towns.
The tax was implemented in an extremely unfair way. The bright side is that it has made it clear that the ecology transition should work hand in hand with an effort to reduce inequalities.
The easiest approach is to remove the billions (nearing trillions) in annual fossil fuel subsidies. People fight against subsidies to clean energy, forgetting how much more flows into an industry that is killing us.
>forgetting how much more flows into an industry that is killing us.
It's not very much. People who write white papers for their think tank or who want to push a particular agenda like to say that not taxing something or someone is the same as subsidizing them. Which is definitely not true in reality. It should be simple enough to see that not taxing has a floor at $0.00, while subsidizing something has no limiting bound at all.
Absorbing the negative externalities of a process is the same as subsidizing it. The subsidy value here is bounded above by the net present value of the negative externalities in question.
What are the externalities of extracting fossil fuels? Or are you attributing the consumption of fossil fuels to the extraction companies? How many degrees removed does one continue to be responsible?
The externality is in removing the carbon from the geosphere and introducing it into the biosphere, since it'll end up in the atmosphere eventually. So yes, the responsibility for the externality is attributable to the extracting companies.
This will hit poor, and low middle class, the hardest.
We are barely getting by as it is.
The poor don't have the luxury of buying new fuel efficient, or electric cars. Our roads are not safe for motorcycles 365 days out of the year. They buy what will get them to work and back hopefully, at a price that won't put them further into debt.
My biggest fear with Global Warming is they make the poor pay for it in sneaky ways.
When smog checks were required in CA, they made it sound like the low income wouldn't be hit hard financially. It didn't turn out that way though. If your vechicle doesn't pass increasing harder smog tests every two years; you end up paying a lot. (I can work on my own vechicles, but thinking about buying a smoke machine because they are now failing for tiny holes where hydrocarbons might escape.)
The assumption is that the tax money would be redistributed to low earners on a monthly basis, much like the child tax credit works now. That way the poor aren't affected and rich bear much of the burden, which makes sense since they also do most of the polluting.
Is this a safe assumption? The majority of our federal budget is spent on social security, health care (more than half on 65 and over), and defense. According to this research, only 8% was spent on safety net programs in 2019: https://www.cbpp.org/research/federal-budget/where-do-our-fe...
I think one could make the case that social security, Medicare and Medicaid are safety net programs. That said, I don’t think that means these taxes would necessarily go to help the poor.
Do the rich do most of the polluting by buying gas though? I am middle class and work from home. I pollute by having a lot of things delivered. Consumption tax shifts the burden to the person delivering things to me, who is probably poorer than I am.
Isn't this the standard argument against consumption taxes?
Shifting the cost onto the delivery service is actually good. Pretty much all delivery is done by a few large companies. The only exception are things like Grubhub/Doordash which put the fuel costs on the individual worker. A fuel tax across the board would no doubt just result in a price increase that would compensate the drivers since it would be a uniform tax.
Outside of specific areas where gig services are regulated - using things like Grubhub/Uber. does cause harm to the poorer, worker because after accounting for costs and vehicle depreciation the profit is less than minimum wage. I would not be surprised if the profit is negative part of the time. The way to not cause this harm is to not use these services e.g. make your own food at home.
Deliveries would just get more expensive if fuel got more expensive.
And I consider delivery to be basic infrastructure that’s the backbone of everything from small Etsy shops to Amazon to B2B shipping, so I wouldn’t want delivery prices to go up.
Sure they do. Your pizza delivery driver won't take that job if they lose money on the gas. Then the pizza place has to either raise their rate or cover their gas, which they would then pass on to you as an increased delivery fee.
A carbon tax would be the most efficient ways to reducing CO2 emissions. It's a far simpler system than trying to work out average average emissions for different fleets of vehicles, never mind trying to balance competing CO2 production coming from various industries, agriculture and transportation. Complicated laws make for loopholes and massive inefficiencies as technology and the economy changes. We should tax precisely the thing we want to reduce.
This is assuming you're actually on board with mainstream science and the problems associated with anthropogenic climate change. If you think climate change is a hoax or harmless, then yeah any carbon tax is a drain on the economy with no upside.
We are barely getting by as it is.
Okay, that's the problem. People need more equitable access to opportunity and a stronger safety net. Better public or charter schools, or more earned income tax credits or a higher minimum wage or maybe even straight up UBI. All of these are things that might address poverty more effectively than repealing smog laws.
There is a really easy solution to that - tax carbon, and put 100% of the revenue into a single bucket, divide that by the number of citizens, and give each citizen that amount.
This means that it is a net positive for anyone who uses less than the average amount of carbon, and incentivizes everyone to use less. Poor people use way less than the average amount of carbon, so it will be a net positive for them.
This is hard to enforce. How about family that doesn't have kids vs one with 4? Each child contributes a lot to carbon emission until adulthood and after that. To be really honest families without children then should have more carbon credits.
It wouldn't be given per family, it would be per person, so those kids would each get a share. I am not sure why that would be hard to enforce.
I am not sure why you think it should be divided by family... that "family without children" was created by a family that had children... why would an adult be more worthy of their share than a kid? A kid probably uses less carbon than an adult.
The whole point is that we don't have to figure out who uses more carbon or who deserves what... we tax the carbon at its source, and let the market figure out how to pass that cost along, and then pay the money directly to people. If you use less carbon than average you get more money than you pay... doesn't matter who you are or how old you are.
You seem to be talking about incentivizing population control... I am very against that, but even if you are for it, I don't think carbon taxes are the way to go for that.
> To be really honest families without children then should have more carbon credits.
What about dead people? They are carbon negative since they are sequestering it in the grave. To be really honest murderers should have more carbon credits.
Edit, in case it wasn't totally obvious, this is reductio ad absurdum
> Poor people use way less than the average amount of carbon
This is not true in a world where most white-collar workers have been working from home for two years (or, increasingly, can afford Teslas), and service employees have to drive to work every day.
Look, I want a carbon tax. It's good on net. But it's regressive and the people will never vote to support it. I live in deep-blue WA and even here the public rejected it.
The gap is large enough that I doubt the shift in work habits was enough to change it. Cars are not the only major source of carbon emissions, and wealthier people have bigger houses:
I think you are misunderstanding the reasons why carbon taxes don't get passed. One, the ones you mention failing were NOT of the type that I am talking about (revenue neutral ones, where all of the money taken in is given right back to the citizens). If you told citizens they would be getting a check every year, I bet you a lot more would support it.
I think you will find that like most policy decisions, it is not the average citizen who is keeping a revenue neutral carbon tax from being implemented, but large carbon polluters who lobby against it and convince citizens not to support it.
The people of a country have an incentive to shape collective behavior that affects the collective, now and in the future. Straight taxes on the item causing problems is the least corruptible way to do it. Such as taxing fossil fuel.
The market will then allocate to which needs the remaining fossil fuel usage should go towards. Presumably, not to using pickup trucks and SUVs to take kids to soccer games and shop for groceries.
