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Yes, but if you don't tax it correctly you will misallocate resources. Diesel will get used excessively and you will get more road wear, as the user proposed.
by impossiblefork 22d ago
Yes, but if you don't tax it correctly you will misallocate resources.
Diesel will get used excessively and you will get more road wear, as the user proposed. If you tax it, you will pay more directly for goods, but as costs rise people will be incentivized to find more efficient transport solutions.
It might still be worth it if road wear is cheap or the predictable misuse is predictable and that saves money somehow, but in all likelihood little harm would come from a fair treatment of diesel vs. gasoline etc. taking into account road wear of each vehicle class. It would be more natural to tax vehicle weight, hours driven etc. directly based on a sound model of societal cost though.
- andrew_lettuce 22d agoYou are not wrong in theory, but this reads like an econ 100 short answer. It ignores all the political and social aspects of a very complex system.
- impossiblefork 22d agoYes, I agree, and of course I sort of try to qualify it a bit. I think cheap, easy transportation has its own value. Creating a sort of fluidity, competition and so on, and it's not like one can't imagine a situation where somebody is the guy who controls all the rail deliveries to a town, or where he has bought all the rail transport demand in the past, so now he gets to be first. Roads, meanwhile, are open to everybody. At the same time, I really do think that it could be beneficial to shrink trucks down, automate them, or create something which has so many bogies that the road wear is not greater than on a car, so I sort of argued for what I saw as theoretically fair without actually being sure that the outcome would be what I hoped for.