Pigou Club vs. Pig Club

Bryan Caplan:

Given all the pork involved in the biofuels ripoff, I think that those politicians who support it ought to be called the Pig Club.

Indeed. Let Kitchen Linker give Caplan a hint: the Pigou Club is the alternative to the Pig Club.

Tax Saudi Arabia, Iran, and Venezuela

A hefty gas tax would initially be paid by American drivers. But as Americans became more fuel efficient as a result of the tax, the tax would be paid by oil producers. Read about tax incidence.

So the U.S. can replace taxes on goods with taxes on bads, save the environment, and make American foreign policy enemies pay the tax!

Kitchen Linker asks: Why are we not doing this already!?

Fix corporate tax competition with green taxes

Today's Financial Times has a subscriber-only article Europe's tax rivalry keeps multinationals on the move bemoaning tax competition and an eventual "race to the bottom" for corporate taxation.

Kitchen Linker says this is not a problem but a grand opportunity: replace corporate taxes (and taxes on increasingly mobile labor) with green taxes. Save the environment, economy, and state, all in one fell swoop!

Another FT article hints this is the way things are going:

French VAT is already at 19.6 per cent, and Germany had implemented some significant structural reforms that remained elusive in France. However the ministry was examining whether some of the tax burden on labour could be transferred, for example through environmental charges, he said.

France’s expression of interest in Berlin’s VAT experiment could be the first of many, according to economists.

“You can see that possibly even Britain is going that way with the debate on the environmental tax,” said Holger Schmieding, senior economist with Bank of America.

Excellent, now go faster, and also in America!

Mankiw's blunder

Greg Mankiw posts that Robert Samuelson has joined the Pigou club in calling for a $2/gallon gas tax. Wonderful.

And Mankiw says:

One purpose of Pigovian taxation, in my view, is to avoid heavy-handed regulations with all their unintended consequences.

Absolutely, a point Kitchen Linker has loved to harp on these last few months.

Approving links to Mankiw have been a feature of the Kitchen for awhile now, even coming to dominate what Kitchen Linker intended to be just another blog about cool tech stuff. But that's good. What could be more important than saving the environment in the most efficient way possible?

Anyhoo, Mankiw makes a blunder in this last post:

I have proposed a more modest $1 increase, in part based on the research of Parry and Small, but of course there is a degree of uncertainty about how high the optimal tax is.

No, no, no! "Optimality" in the sense of correcting for externalities is the wrong, wrong, wrong metric to judge a Pigouvian tax by.

What is the right metric? Is the tax an better than growth-destroying taxes on labor and capital? That's all. Debating optimality may be a pins-on-the-head-of-an-angel-counting excercise for academic papers but is totally irrelevant to the public debate and to reality, which consists of trillions of dollars of taxes on production that could be shifted to taxes on destruction.

Pigou Talk!

Two important updates from Pigou-father Greg Mankiw. First, signs that a carbon tax is being taken seriously in the halls of government. Way cooler, Ray Magliozzi of Car Talk has a page advocating higher gas taxes.

Government employees and public transit

Freakonomics points out that a New York Times article notes that in Manhattan government workers are the group second most likely to drive onto the island (most likely are workers in "transportation, warehousing and utilities"), likely because they get free parking with their government jobs (and probably many get free use of vehicles).

Kitchen Linker says government employees should be required to take public transit or at least should not get any subsidy for private transportation. This will result in more lobbying for better public transit (who is in a better position to lobby than government employees?), better transit, and more of everyone using public transit, in a virtuous cycle.

Be frugal to be green II

stecay makes the case that frugality is the easiest and best way to be green:

A typical, and in my book unimaginative response to An Inconvenient Truth is along the lines of 'My next car's a hybrid'. Other commentators wax lyrical about 'a Prius in every garage'. And so on. Sorry, but I find it hard to buy a notion of the car as a route to ecological nirvana.

It's not very high tech, but the best (and easiest) way to be green(er) is to consume less.

Be generous. Use your car less.

Kitchen Linker agrees.

Bush's Pigouvian opportunity

It is no surprise that in order to pay for massive increases in federal spending (think Iraq and drug payments) Bush will raise taxes. If Bush is smart (stay with Kitchen Linker; even a broken clock is smart twice a day) he would use this "opportunity" to join the Pigou Club and increase the federal gas tax.

Dear GWB,

Extending the payroll tax will not contribute to your legacy. Taking the first step to efficiently save the planet from climate change will. You decide.

Sincerely,
Kitchen Linker

p.s. Top Democrats have good ideas on tax simplification that should be bipartisan. Work with them.

Welfare Sun King

Solar-Powered Welfare shows what you get when you choose planning over Pigou. Tax credits for the wealthy.

Pigou means less planning and it saves the environment. What a deal!

D 1.0 coming

According to Slashdot version 1.0 of the D programming language is coming soon.

Very exciting! Kitchen Linker endorses big compatible improvements to the current paradigm.

D made an appearance in the kitchen once before, regarding green programming.