By Craig Hanson
Gregory Mankiw is the latest public figure to call for a substantial increase in the gasoline tax: $1/gallon phased in over ten years. Mankiw is a leading economist now at Harvard University and a former chairman of Bush’s Council of Economic Advisors. In a Wall Street Journal editorial, Mankiw cites many reasons why a gas tax is a good idea, including environmental protection (including global warming), national security, and economic efficiency.
Mankiw is far from alone. For instance, leading columnists Thomas Friedman (New York Times) and Charles Krauthammer (Washington Post) have been pushing the same idea for years.
From an environmental perspective, higher gasoline and oil taxes are a good thing. Higher taxes mean higher gasoline prices, which, as we’ve recently seen, create demand for more fuel-efficient cars. Greater efficiency means less air pollution. Most economists (including Mankiw) believe that simple fuel taxes are superior to regulations like CAFE that have the same goal, better vehicle efficiency.
Enter the Carbon Tax
Energy taxes are a form of green tax, but they aren’t necessarily the best. A WRI and Duke Energy issue brief looks specifically at carbon taxes
Craig Hanson, Director, People & Ecosystems Programchanson@wri.org+1 (202) 729-7624Craig is the Director of WRI’s People & Ecosystems Program. Craig is responsible for guiding the Program’s overall strategy, focus on results, financial development, and staff capacity.
