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With taxation, we usually use "progressive" and "regressive" relative to a baseline of proportional to income: "A progressive tax is a tax in which the tax rate

by jefftk 3y ago

With taxation, we usually use "progressive" and "regressive" relative to a baseline of proportional to income: "A progressive tax is a tax in which the tax rate increases as the taxable amount increases." So it isn't enough to say that VMT is correlated with income: if it goes up with income but decreasing as income increases a tax would be regressive, and if the reverse it would be progressive.

jeffbee 3y ago
I think you'd have to do the math. VMT is very correlated with income and many low-income people have none. Higher income people choose bigger cars with expensive tires.
- jefftk 3y ago
  Have a look at https://www.fhwa.dot.gov/policy/23cpr/chap3.cfm https://www.fhwa.dot.gov/policy/23cpr/chap3.cfm While none of the figures there have exactly what we want, they do suggest that VMT goes up less than linearly with income. For example, 3-23 and 3-27 show distance per vehicle and distance per driver going up way slower than income (but rich people have more vehicles and more rich people are drivers). Overall, richer people spend a much lower fraction of their income on transportation, and that's been stable for decades: https://www.bts.dot.gov/data-spotlight/household-cost-transportation-it-affordable https://www.bts.dot.gov/data-spotlight/household-cost-transp...
  - jeffbee 3y ago
    The trend goes in the right direction. If you are absolutely dedicated to making this strictly progressive, despite the clear externalities of driving justifying a "sin tax" approach, you could exempt from any proposed tax the market price of a 195/55R15 tire or other index of basic tire price.
    - jefftk 3y ago
      Consider the following three taxation systems: A: 20% up to $10k, then 15% up to $100k, then 10% on income above that B: 15% on all income C: 10% up to $10k, then 15% up to $100k, then 20% on income above that Using the standard terms, A is regressive, B is flat, and C is progressive. But using your terms the "trend goes in the right direction" for all three. I'm not attached to tire taxes being progressive; my objection here is about diluting the meaning of progressive and regressive. (My preferred approach here, as in lots of places, is https://www.jefftk.com/p/pricing-benefiting-everyone https://www.jefftk.com/p/pricing-benefiting-everyone : tax the thing without worrying about the tax being regressive, and pair it with a strongly progressive equal-per per-person transfer.)
      - jeffbee 3y ago
        That's the system I prefer as well! Why are we debating this? I only engage with this argument because bad-faith car addicts often try to block any kind of reform by saying it harms the poor. But as you say on your page, redistributing the revenues of these things per-capita is naturally progressive, and that doesn't need to be means-tested because income taxes are already progressive and the refunds would be income.
        jefftk 3y ago
        We're debating this because you countered "Taxes on these things are usually regressive so no thanks" with "VMT is strongly correlated with income, so people with higher incomes would pay more tire taxes" which sounded like you thought it was a claim that the proposed tax would not actually be regressive. (This isn't a disagreement on policy, but me being pedantic about terms.)

by jefftk 3y ago

jeffbee 3y ago

I think you'd have to do the math. VMT is very correlated with income and many low-income people have none. Higher income people choose bigger cars with expensive tires.

jefftk 3y ago
Have a look at https://www.fhwa.dot.gov/policy/23cpr/chap3.cfm https://www.fhwa.dot.gov/policy/23cpr/chap3.cfm While none of the figures there have exactly what we want, they do suggest that VMT goes up less than linearly with income. For example, 3-23 and 3-27 show distance per vehicle and distance per driver going up way slower than income (but rich people have more vehicles and more rich people are drivers). Overall, richer people spend a much lower fraction of their income on transportation, and that's been stable for decades: https://www.bts.dot.gov/data-spotlight/household-cost-transportation-it-affordable https://www.bts.dot.gov/data-spotlight/household-cost-transp...
- jeffbee 3y ago
  The trend goes in the right direction. If you are absolutely dedicated to making this strictly progressive, despite the clear externalities of driving justifying a "sin tax" approach, you could exempt from any proposed tax the market price of a 195/55R15 tire or other index of basic tire price.
  - jefftk 3y ago
    Consider the following three taxation systems: A: 20% up to $10k, then 15% up to $100k, then 10% on income above that B: 15% on all income C: 10% up to $10k, then 15% up to $100k, then 20% on income above that Using the standard terms, A is regressive, B is flat, and C is progressive. But using your terms the "trend goes in the right direction" for all three. I'm not attached to tire taxes being progressive; my objection here is about diluting the meaning of progressive and regressive. (My preferred approach here, as in lots of places, is https://www.jefftk.com/p/pricing-benefiting-everyone https://www.jefftk.com/p/pricing-benefiting-everyone : tax the thing without worrying about the tax being regressive, and pair it with a strongly progressive equal-per per-person transfer.)
    - jeffbee 3y ago
      That's the system I prefer as well! Why are we debating this? I only engage with this argument because bad-faith car addicts often try to block any kind of reform by saying it harms the poor. But as you say on your page, redistributing the revenues of these things per-capita is naturally progressive, and that doesn't need to be means-tested because income taxes are already progressive and the refunds would be income.
      - jefftk 3y ago
        We're debating this because you countered "Taxes on these things are usually regressive so no thanks" with "VMT is strongly correlated with income, so people with higher incomes would pay more tire taxes" which sounded like you thought it was a claim that the proposed tax would not actually be regressive. (This isn't a disagreement on policy, but me being pedantic about terms.)