The Downside of More Miles Per Gallon (Ep. 115)
Our latest Freakonomics Radio on Marketplace podcast is called “The Downside of More Miles Per Gallon.” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript here.)
The gist: the Federal gas tax is a primary source of infrastructure funding but, politically, it has proven a hard tax to increase. Furthermore, because the tax is a fixed amount (18.4 cents per gallon) rather than a percentage, gas-tax revenues don’t rise even when gas prices do — as has been happening lately.
Then there’s the option of fining traffic offenders based not on how badly they were driving but on how much money they earn. If nothing else, this might be a great jobs program, since high earners would have a very strong incentive to hire lots of chauffeurs.
(HT on VMT tax: Kevin Murphy)