Thursday, August 23, 2007

Cato takes on the Pigou Club

A new Cato Institute publication says "state and federal gasoline taxes should be abolished." I have not read it thoroughly enough to comment (the weather has been too nice and my kids are still out of school), but as founder of the Pigou Club, I thought I should alert my blog readers to this new study on the principle of full disclosure.

I do have one question for the authors: If Congress were considering repeal of the gasoline tax together with an income tax increase to make up the lost revenue, would you favor this revenue-neutral change in the tax mix?

Update: Jerry Taylor from Cato emails me:
The answer to your question is that we would favor an elimination of federal highway and mass transit spending to correspond with an elimination of the federal gasoline tax. Highway and mass transit programs are more appropriately shouldered by state and local governments.
Judge for yourself whether that answers the question.