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Old 03-02-2004, 04:11 PM   #9
Bruce Levinson
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Re: The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

Quote:
Originally Posted by savage_with_wrench
I am really glad that there are people in these forums that have something intelligent to say.
Indeed, and you are most high on the list.

I would like to raise two issues with respect to your thoughtful discussion.

1) Distribution impact on “average” commuters. Although $23/month may not seem like much to many people, there are certainly lower income workers for whom it would be a significant sacrifice. However, even more importantly, that $23/month average is going to encompass a wide variance of actually tax increases on the auto commuting population. Certain categories of commuters in particular will be paying a higher than average amount including; worker who live in rural areas and have longer commutes, blue collar workers who need pickup trucks, vans, and other less fuel efficient vehicles and lower income workers who are driving older, less fuel-efficient vehicles. Although I certainly favor improved Northeast Corridor rail service (although Amtrak is actually doing a pretty good job right now), I seriously question whether the rural blue collar workers should pay a disproportionately large share of the burden. If we are going to increase subsidies for mass transit and intercity rail, it should be done through as fair and equitable a mechanism as possible.

2) Sufficiency of the subsidy. I would be curious to know as to basis for the suggestion that tripling the federal fuel tax would produce anywhere near the revenues needed to subside the cost of hybrid vehicles down to the Chevy Metro level. A large government subsidy for hybrid vehicles could result in demand for outstripping the funds available to pay for the subsidy. Furthermore, the large subsidy could result in some perverse outcomes, such a commuters who ditch mass transit in favor of government-subsidized cars. Furthermore, if the government was to subsidize large purchases of current generation hybrid vehicles, where is the incentive for automotive manufacturers to continue to improve their offerings?

Overall, however, you have raised important issues deserving of substantial consideration.
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