Thursday, December 15, 2005

1899 Unintended Consequences, pt. 3, taxes

Found at Chicago Boyz

With wages frozen by government edict during WWII, employers begin offering non-taxable health insurance to attract and retain scarce employees. The next sixty-odd years will feature numerous proposed government solutions to this unintended secondary effect of the original government solution.

Automobile companies in the 1980s improve the anti-theft features of their products. As cars become more difficult to hot-wire, thieves increasingly turn to carjacking. The US Department of Justice begins keeping survey statistics for this crime in 1987.

CAFÉ (Corporate Average Fuel Economy) fuel economy requirements in the 1990s cause carmakers to build smaller, lighter vehicles. Consumers react to the space shortage and crash dangers by buying SUV's.

From the Gristmill (environmental)

. . . a 10 percent improvement in fuel economy reduces fuel consumption by 6 to 8 percent (a good thing), but also increases driving by 2 to 4 percent. The increase in driving increases congestion, parking costs, noise pollution, and traffic accidents. Plus, making driving cheaper fosters sprawl, while an increase in vehicle traffic makes walking and biking more dangerous and less convenient. Assigning a rough dollar value to these competing effects, it looks as though an increase in fuel economy standards is actually a net economic loss for society, because the costs of increased driving outweigh the benefits of fuel and pollution savings.

Q and O Blog (conservation)

“As gas prices continue to top $2 a gallon, all those drivers of fuel-efficient cars may not have reason to gloat for much longer. Oregon is worried that too many Honda Insights and Toyota Priuses hitting the roads will rob it of the cash it expects out of its 24-cent-a-gallon tax. So the Beaver State is studying ways to ensure that "hybrid" car owners pay their "fair share" of taxes for the miles they drive. That means allowing the taxman to catch up to hybrid owners just as often as he catches up to gas guzzling SUV drivers. And if Oregon goes ahead, it won't be long before other states follow.”

GAO Report, 04-641

High cigarette taxes contribute to smuggling which results in lost tax revenues, but more important illegal cigarette trafficking worldwide is a multibillion dollar a year crime phenomenon, according to ATF, with some cigarette smugglers having ties to terrorist groups.

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