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> The worst taxes are the ones that are regressive and secret. In my book, negative externalities are worse than taxes. If we agree that a car driving in Lower
by ilya_m 2y ago
> The worst taxes are the ones that are regressive and secret.
In my book, negative externalities are worse than taxes. If we agree that a car driving in Lower Manhattan inflicts a non-trivial cost on everyone else, then not taxing it leads to socially inefficient outcomes.
Effectively, locals are paying a price either way - either by having their bus moving slower, inhaling fumes, etc, or by buying goods and services that reflect congestion pricing. The difference is that congestion pricing aligns incentives - for instance, delivery drivers may choose to travel to Manhattan during the off-peak hours whereas in the status quo they do not care at all about inconveniencing others.
- imtringued 2y agoPeople don't grasp that you can get wealthier simply by avoiding harmful things that would otherwise be done by default.
- throwaway7ahgb 2y agoOP wasn't arguing about "cars", it was specifically about service vehicles that are required for Manhattan operations. Thought experiment: If we could somehow ban private residential use of all cars and only allow "work" vehicles, there would be no congestion and no tax.
- neilknowsbest 2y agoThere are some good arguments against that. It creates a deadweight loss by banning high utility private uses of the car (driving kid to hospital) and instead there would be an increase in low utility "work" uses of the car (delivering a single banana to a bodega). There is a parent out there who would be willing to pay $X to drive their kid to hospital, and a work vehicle user who would forgo paying $X by staying off the road, but under a blanket ban that won't happen. It would also increase the incentive for people to play games like claiming their personal car as a "work vehicle", throwing a little advertising decal on the side, things like that.