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Yglesianomics

The Dean of the Credulosphere was trying to write about economics today, to hilarious effect:

And if we made gasoline more expensive through, say, higher gas taxes or a carbon tax then not only would we secure the public health, congestion, and environmental benefits of expensive gas but the government would have a good source of revenue with which to mitigate some of the consumer pain.

So . . . higher gas taxes are the solution to the consumer’s problem of high gas prices. Got that?

But there is a serious point to be made here, which is that it’s very interesting to observe the contradictions among liberals between their desire for progressive taxation and their advocacy for higher gasoline taxes. Demand for gasoline, in economics jargon, is inelastic, meaning that a change in price is not rapidly followed by a change in demand. In other words, the working mother who has to commute 10 miles to work each day cannot in short order switch to a job closer to home or buy a Prius, and so she is forced simply to pay the higher prices and reduce spending in other parts of her budget.

Normally, this is exactly the kind of scenario that would register significant rumblings on liberals’ economic seismographs, which are finely tuned to detect injustice: gas taxes are a classic example of regressive taxation, in which the tax burden falls disproportionately on the poor. New gas taxes wouldn’t have the slightest effect on the behavior of rich guys living high-consumption lifestyles, but would eat up a significantly higher portion of a poorer person’s budget. Yglesias and his tax-loving co-religionists can either be champions of the working classes, or they can lead a campaign to tax America’s carbon footprint into submission. But they can’t credibly do both.


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