I thought you'd mention that, although I didn't expect you to call it a "tax." More on that in a bit. But I'd surmise that any increase in said penalties has to do more with an increased societal awareness and subsequent social demand to minimize these alcohol-related externalities. That is to say, the social demand does get factored into consideration without having to impose a monetary "tax."

Now, as to this conflation of the term "tax" and "penalties" that you've engaged in above...if you're going to use these terms interchangeably, then you might as well be in favor of a "command economy." Because by that logic, "Prohibition" was a "tax" as well, and I'm sure back then that the social (external) costs of alcohol consumption was perceived to be so great so as render said consumption unacceptable in any way, shape or form. And we all know how Prohibition went.

Sure, i'll buy that. it's theoretically possible. It's also incredibly unlikely in the real world. Further, even if you do manage to hit the bullseye, you've almost certainly left a trail of destruction in your wake. For every thing you "fix" via taxation, you break something else. no worries, we'll just enact another tax to fix that!

Yes, I guess I'm not getting it. I know you've asserted this over and over again. But asserting doesn't make it so. The fact that I get "something" doesn't mean I got equal value to what I paid (in fact, it's likely that I didn't - because if I did, there wouldn't be any need to force this transaction).

But $X doesn't. Because government is (necessarily and unavoidably) inefficient. And even if government COULD operate without destroying wealth in the process, you still have the problem of efficiency of allocation.

Example: government taxes everything at 100% and gives all the money to OJ Simpson. In the aggregate, society has not been damaged. The exact same amount of wealth exists. It's been moved around a bit, that's all. $X is "given back to society". So this is a pretty good outcome, no?

How so? You're claiming that because I get a benefit in exchange for my taxes, the tax is justified, aren't you? Perhaps you need to clarify your point here.

I'm not claiming any particular size of the waste. The fact that it exists at all is the problem. Do you deny that it exists?

So you're saying then (from what I can gather) that pulling people over and giving them tickets for 'driving with gas' is something we could implement to make people take into account their costs on others? Seriously?

I did ask for how this cost could be considered in the private transactions, without hand waving, and the above is what I got. I don't see the point, other than we've made people internalize their costs through tickets. So I can only guess you're wanting us to ticket people or throw them in jail for driving.

Prohibition is essentially equivalent to an infinite tax on some good. No externality on any good is infinitely large, so that's a non-starter.

No economist would take such a black and white view as you tried to portray in that last paragraph. None. Because we all understand that there are tradeoffs to everything, and nothing EVER has an infinite cost. Maybe an extremely high cost, but never infinite.

Not really. But that's not what we're talking about. You've admitted that already. A better analogy would be that you break my window, then say, "hey that window is worth $X (where you arbitrarily decide what X is), here's a hotdog worth $X (where you arbitrarily assign X to the hotdog).

This is a different argument. Just because I pay a gas tax so I don't have to pay an internet poker tax does not mean that the gas tax is correct.

No. What I'm saying is that even accounting for some waste, Society can still be made better off if the externalities (as they are with gasoline) are large. If you'd actually read the links I gave, you'd see this--there is a lot of room to increase public welfare. Plenty of room so that even if there is some waste society is still better off.

No, but the point of that argument is that the tax is returned back to people's pockets, even if it is just because other taxes are reduced. One of the arguments that pvn is trying to put forward is that the taxes just fly into a black hole, and I am showing some ways they are in fact returned.

Incorrect. First, my analogy was correct in the sense that people were saying things had to be returned in EXACTLY the same form. My analogy clearly shows that argument is incorrect.

Now to yours....no, the correct analogy was 'I'm going to charge you $X for this hotdog anyway, whether you like it or not. but since I did $X damage, this hotdog is free'. In other words, you don't have an ADDITIONAL $X taken from your pocket, as you would have without the damaged window.

Now, if you want to argue that you dont' want the hotdog supplied, fine. I can't argue that. But what I'm saying is that you're going to be charged less, and that's the savings to you.

If you were already going to have to buy the door, then yes. And that case is the correct analogy.

Well there you go. That was easy enough.

If I don't want the door?

i.e. lets say that the gas tax is going towards directly funding the Iraq War. I don't want to pay for the Iraq War.

Now what?

You gather wrong. You're the one who conflated the terms "tax" and "penalties" and presented the above argument. I responded by saying that social awareness and stigma - in other words, a form of social "demand" against the "drunk driving homicide" externalities of alcohol consumption - had more to do with curbing this behavior than any monetary tax on alcohol. Then you pull this bait-and-switch and suggest that I'm the one who supports jailing people for buying gas? Where did I ever state or imply that?

Because, you know, committing vehicular homicide via drunk driving is a bit more grave than simply driving a gas-powered vehicle. So any education or awareness campaign (which I do support) re: gas usage would need to be proportional to the gravity of the externalities. That is to say, no jailing of gas-powered drivers are desirable or necessary, in case you didn't gather that by now. By the same token, however, I submit no monetary tax is necessary or sufficient to address said externalities, just as no monetary tax is necessary or sufficient to address drunk driving accidents.

But here's the problem. Even assuming as true your broad, unsubstantiated assertion that "no economist would take such a black and white view," *politicians* and *policymakers* do often think in that manner. How do you think we had Prohibition if that weren't the case?

Which again goes to show that the government and its policymakers cannot be trusted to implement societally optimal measures better than the market can.

BZZZZZT! sorry, try again. This time, maybe after reading and understanding what you're arguing.


I have asked for references for your assertations. you have yet to provide them. Please do. How much money 'magically' disappears?

People have said (from your side) that all the taxes are all put in one big pot. I agree with this, and say then to get $100 in that pot, and $20 comes from the gas tax, then we only have to pay $80, for a savings...wait for it...of $20. That is one way it is refunded. You seem to claim this isn't the case. Show me. Where's your reference?

What percentage? How much? Reference?

Hmmm...As I mentioned earlier, my optimal amount is based on Pareto Optimal points. Without a tax on gas, we are not at a Pareto efficient consumption. We can make everyone better off. I explicitly said that you cant' say whether one PO allocation is better than another.

So your counter to the argument is to take one PO allocation, and a second, and try to see which is better? WTF?

Please, please, please, try to understand what you're talking about. You're making quite elementary mistakes that really shouldn't be made. Sorry if I'm a bit impatient with this, but I've said things so many times, and given resources and references for you to understand, but you evidentally refuse to learn and keep arguing from ignorance. I have to think that you're smarter than that, and could understand the concepts with minimal effort.

But that was never the point...

Also, I reject your notion that "prohibition" or outlawing of any activity is de facto equivalent to an "infinite tax." Why? Because there are different levels of penalties for engaging in a prohibited activity. Some penalties may be as light as a fine. Other penalties may be life in prison or execution.

So not all penalties are equal, meaning they are not "infinite."

Point was to make it a correct analogy, you were going to have to pay for a door anyway.

LOL.

Let me get this straight.... I take your shoes, then give you a turkey sandwich. You were going to have eat lunch at some point, and now you're charged $0 for lunch, so that's SAVINGS!

Am I getting this right?

The amount collected does not equal the amount returned. Agree or disagree?

I don't know. What difference does it make? SOME disappears, agree or disagree?

Where is the savings here? How is this a refund?

I normally charge you $10 for service X. But now I'm going to bill you $2 today and $8 tomorrow. The $2 goes towards your $10 bill, you save $2 because now you only have to pay $8!

What am I missing here?

So just to get this straight....I owe $100 right? $80 of it comes straight out of my check, $20 comes from me buying gas. How much have I paid?

How is that different then me just paying $100 from my paycheck or from buying beer or from anything else?

I never thought you did. This particular part of the thread came from when I asked for some ways to internalize the costs without a pigouvian tax. The only reply I saw with anything concrete in it was yours. However, while the solution works for drunk drivers, my point is that it doesn't actually answer the question I had, and that was how to have private markets (or whatever the ACists are trying to put forward) handle the externalities from gasoline consumption.

Again, how? And where do you think the money for the anti-alcohol ads comes from?

For the vehicular homicide, yes, there are penalties for that. But there's a lot of loss of life from veichles that isn't attributable to something else--every once or twice a year it seems I hear about someone on the local highway getting killed because a tire came off a truck and hit the car they were driving in. And many other situations where noone did anything wrong, but someone still was killed or hurt. First, those probably shouldn't be penalized. If they are, then do you really want to drive around where through no fault of your own, your life could be destroyed because someone wasn't paying attention and darted out into traffic?

And that's why pretty much every economist is railing against the gas tax holiday. Again, I am here to talk about the externalities, the gas tax, pigouvian tax, etc. I am not going to talk about an AC world versus the current world. If you want to talk about that, I respectfully will exit. Well, at least as this goes, I will choose not to reply to those debates.

OK, I'll take this, and the other two or three comments around yours saying the same thing.

First, I would agree. Now, if you think that means you've won the argument, you're SORELY mistaken. Again, you haven't read my arguments and the references that support that argument. It gets tiresome when you're being intentionally ignorant.


But, here goes. I'm making up these numbers, but the relative values are correct. Again, if you want to dispute them, please read my linked references before you argue yet again from ignorance.

So without the gas tax, suppose the consumer and producer surplus is $150, but the cost to society (from externalities) is $50, so the welfare of society is $100.

Now, put an pigouvian tax on gasoline. Now, consumer and producer surplus drops to $80, but the government collects $40 in taxes.

If the govt returns $30 of the $40 (or to say, $10 is burned), the welfare of society increases to $110 from $100. If the govt is extremely wasteful, then the welfare may decrease.

That is why I was asking you to support your claim for govt efficiency and asking for percentages of waste.

I'm not an anarcho-capitalist, although I am sympathetic to some of their viewpoints. But an ACist might say that in order to deal with gas consumption externalities the ACist way, you would need to begin by fundamentally overhauling the way societies operate such that a central government, with all its powers of taxation and monopoly, is done away with. Then you would implement a society where respect for private property rights is king, and any 3rd-party invasion of private property, whether it be congestion of the roads you own or polluting of your lungs, would be dealt with in the private sector.

As to exactly how it will work I do not know, but chances are the market will find a way - either through a more efficient allocation of roads (including underground railways and airtrains), faster development of alternative energy sources, technological advances cutting down on pollution / congestion, etc. All of which advances the government and Big Oil are probably impeding at this very moment, with subsidies to boot.

Government-sponsored anti-alcohol ads aren't essential. Private news organizations reporting on drunk driving incidents do a dandy job of publicizing the act. Word of mouth, through websites, radio, blogs, forums etc. are also efficient ways to spread ideas.

Once or twice a year? Well, there are probably more pressing externalities to worry about, then. And if a tire came off a truck, chances are someone didn't do his proper share of maintenance, so I don't agree that "no one did anything wrong."

Addressed above.

Is there no cost to society in scenario 2, i.e. no externalities? I guess if you counted the $30 in tax money the govt spent against your $50 in externalities you would have to subtract $20 from your welfare of society leaving you with $90. Which AFAIK is worse than $100.