taxes

Berkeley's program to finance solar systems through property tax assessments is off to great start

The city of Berkeley, Calif. is pioneering a program to help homeowners finance solar systems through property tax assessments. How's that working out?

The first tranche of funds sold out in nine minutes.

And on Friday, the first two checks were handed out to proud owners of new solar systems. Meanwhile, we were able to tweak the federal tax code to ensure that program participants can still use the federal investment tax credit (thanks, Speaker Pelosi). And we are working with partners in eight states and counting to get enabling legislation on the books to allow more cities to replicate the model.

Note that this program can be set up to fund more than just solar electric.  Solar hot-water and energy-efficiency upgrades can and should be included as well.

Sales tax shortfall could affect Seattle's public transit

This whole "economic downturn" thing is tricky business. As I've mentioned, it may be helping boost transit ridership numbers as cash-strapped folks abandon their cars.

But those same cash-strapped folks are also buying less stuff (even if they are buying locally). Buying less stuff means less sales tax generated in Washington state. And because Seattle's Metro bus service gets more than half of its revenue from a dedicated sales tax, this is not good news for Seattle's primary mode of public transit.

To give it to you in (rather depressing) numerical form, King County administrators have said that Metro's sales tax revenue losses over the two-year 2008-2009 period could total $100 million -- that's 800,000 to 1 million hours of bus service. (And that doesn't count the time you'll spend standing around at bus stops waiting for a ride.)

What gas taxes don't do

Surprising: state gas taxes appear to have very little effect on either driving habits or fuel consumption. More precisely, there's no correlation between a state's gasoline tax and the amount of fuel its residents use or the amount of driving they do.

Don't believe me? Feast your eyes on these babies:

And:

Those are big, fat, completely uncorrelated blobs. What you're seeing is all 50 states plus D.C. plotted to show a relationship between state gas tax rates and per capita fuel consumption (in the first chart) and per capita miles driven (in the second chart). There is essentially no relationship whatsoever.

Conservative touts gas tax as cure to all ills, alternative to other climate/energy policies

The Weekly Standard cover story last week was by Charles Krauthammer: "The Case for a Net-Zero Gas Tax." Joe Klein calls it "an absolutely compelling, and completely unexpected, argument" and the tax itself "without doubt, the most elegant way to lower carbon emissions and dependence on foreign oil."

Your honor, I object.

First off, it isn't unexpected -- Krauthammer has argued for a gas tax before. And you'll notice that more and more conservatives are popping up in favor of refunded gas or carbon taxes. (See, e.g., here.)

Second of all, it isn't particularly compelling. In fact, it's full of howlers. More on that later.

Third of all, re: "elegant," I can't speak to its aesthetic appeal, but a gas tax is most certainly not the fastest or cheapest way to lower carbon emissions and dependence on foreign oil.

Fourth of all, if you find yourself agreeing with Charles Krauthammer, one of the most vicious, mendacious soldiers in the right-wing chickenhawk brigade (see, e.g., here for his argument for torture), it's time for some soul searching.

After all, Krauthammer is quite clear that he views a gas tax as an alternative, not a compliment, to government investments or regulations. Indeed, he seems to think a $1 gas tax would single-handedly drop U.S. oil use, cut world oil prices, cripple hostile regimes, and make the U.S. energy independent. And maybe increase your sex appeal. And it could do all this while obviating or eliminating other environmental policies.

On regulation:

Before we debate gas taxes vs. mileage taxes, Oregonians must pay for roads with those taxes

Oregon Governor Ted Kulongoski (D) has attracted a lot of attention by calling for an expansion of a pilot program that replaces the gas tax with a per-mile tax which charges the same fee to a Hummer driver as a Prius driver.

The pros and cons of mileage taxes vs. gas taxes are discussed in a post to the political blog BlueOregon, and the same essay was sent out as a query on a transportation activists' listserv. I started several times to respond ...

But I end up stopping, because this whole discussion ignores the elephant -- heck, the blue whale -- in the driveway.

American Enterprise Institute endorses tax credits for super-efficient, furnace-free homes

If the American Enterprise Institute starts acknowledging that residential energy efficiency has a "positive rate of return" -- and advocating federal support to capture the full energy savings possible -- perhaps the world is changing.

Then again, it may just be temporary institutional schizophrenia, since others in AEI continue to assert (without any supporting evidence), "No matter what you've been told, the technology to significantly reduce emissions is decades away and extremely costly."

Kevin Hassett, AEI's director of economic-policy studies, has a Bloomberg News column that I excerpt below, because of its surprising degree of common sense -- and because he cites actual research:

They affect consumers the same either way, and upstream is simpler and more transparent

In his post on conservatives and carbon taxes, David said:

First, we have to remember all the places the price signal created by an upstream tax can be diluted or stymied on the way to consumers -- i.e., those who can change their behavior in response to prices. Not every industry or business will pass an increase in operating costs directly on to the next link in the chain. Information failures and split incentives abound. Price signals that begin strong, catholic, and clear become fragmented and faint downstream. For all the hype, an upstream carbon price will deliver fairly little incentive to where the carbon is used.

There are two problems with this: It is overstated, and it places blame in the wrong place, i.e., the fact that the tax is levied upstream.

American taxpayers help pay for coal sent to China

Lee Buchsbaum writes that U.S. coal producers increasingly find it more profitable to export their product: With the falling dollar, selling to Asia, Europe or South America is giving coal producers a higher return than selling into the United States. "If I were running a coal company and I looked at what’s happening on Capitol […]

WaPo editorial reflects lazy resort to gas tax as answer to carbon troubles

The Washington Post has an editorial on the challenges of addressing global warming that contains this passage: To reduce greenhouse gas emissions and lessen dependence on fossil fuels, there must be a price on carbon. A cap-and-trade system is the easiest way to integrate into an international regime, but its pitfalls are legion. A gas […]