A Latte Tax


A reader reacts angrily to my suggestion that a gas tax might be a good idea:

In the general spirit of experimenting on the general public with another sweeping, life-rearranging set of expenses, I propose a 90 percent across-the-board tax on lattes, organic foods, and Oscar-/Pulitzer-worthy entertainment output.

I apparently shocked at least one other reader by replying "sounds fair to me". "Really?" he asked.

Yes, really.  At least, sort of really.

You cannot get around the fact that the people who think a gas tax would be ultra swell are the people who aren't going to be paying much of a gas tax.  (More than they think--their food and goods do have to be trucked from somewhere.  But on net, they would be made better off by a gas tax which substituted for other potential forms of taxation, while people living in rural and exurban locations would be made much worse off.)

Nonetheless, we do have to have taxes; taxing activities that are costly to the environment is better than taxing things like work; and thus I really do believe we should have a gas tax.

But of course, I can also see why my rural readers would be mad that I am so magnanimously willing to tax the bejeesus out of them in order to save the environment.  If I think a gas tax is really so swell, then I should presumably be willing to pay personally in order to see it implemented.  So I think it's perfectly fair that the political price of a carbon tax should be taxing something that urban people enjoy, and rural people don't.

I'm not sure lattes and entertainment are the right things, however.  Lattes are now enjoyed widely across this great land, and HBO has plenty of exurban subscribers.  Perhaps we could add a hefty surcharge to electricity, home-heating oil, and natural gas bills in urban areas where the average commute, measured in miles, is less than 50% of the national average. Or levy a special property tax on same.  We could add a 20% tax to restaurant meals that cost more than $10 a head, or slap a $200 surcharge on international airfares to everywhere except Mexico and Canada.  These are just starter proposals, of course.  I'm open to other suggestions.

But won't this remove some of the benefits of taxing gasoline, like moving folks back into the city?  Maybe, but I doubt it.  Anti-sprawl activists often complain that people do not correctly assess the "true price" of moving farther out, like higher home heating bills and more expensive commutes.  If true, then I'm betting they won't check their electricity bill before they move back either.  Besides, there's a limit to how many people we can move back into the cities and inner suburbs, for the simple reason that upzoning is getting more and more rare.

If we're going to solve our country's problems, we will not do so by finding proposals that primarily take money from "them".  Nor will we do it by each side, after a lot of yelling, grudgingly agreeing to let the other folks of the hook as long as they don't have to pay either. I'm willing to pay for what I think is right.  And I hope I'm not alone.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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