Cascadia Scorecard Weblog

Tax Shifting in the Blogosphere

Not so long ago, it seemed like gas at $2.33 per gallon cost an arm and a leg; now it seems like a bargain.  And not surprisingly, high prices at the pump have spawned a backlash against fuel taxes across the US -- and have added fuel, so to speak, to the campaign to repeal Washington's most recent gas tax hike.

As a general matter, I think that responding to high gas prices by rolling back taxes is misguided.  The specifics get murky, of course, since a lot of the money raised by gas taxes is slated for dubious highway projects--so a vote for higher gas taxes isn't always a vote to reduce gas consumption.  But in general, gas taxes are too low, not too high:  right now, they don't even pay for roads, let alone incorporate all of the other external costs (pollution, greenhouse gases, noise, collisions, congestion, etc.) caused by driving and burning fossil fuels.  A stiff & sustained gas tax would do a lot more to reduce gas consumption than all the preaching in the world.

Still, even though I tend to favor higher gas taxes, one thing is clear enough:  gas taxes are regressive.  Like high gas prices, they hurt the poor the most.  Which, if you care about fairness and equity in the tax system, is a bad thing.

The question is -- as a matter of policy, what do you do about that?

For years we've advocated tax shifting--that is, raising taxes on gas, but lowering other regressive taxes, such as the sales tax.  Depending on how you structure it, you could actually wind up reducing the total tax burden on the poor, while still creating across-the-board disincentives for gasoline consumption. 

It seemed like a completely reasonable idea when I first heard about it -- but I hadn't heard many other folks making the same argument.  So I was pleasantly surprised to see similar thinking starting to echo around the blogosphere:  see, for example, here and here, along with a reference to this pdf.   

Here's hoping that this is an idea that keeps echoing.

The Rich Get Richer

Sure, the US national poverty rate has risen for 4 consecutive years and median income is stagnant. But the good news is that, according to the recently released Forbes 400, the nation's 400 wealthiest individuals collectively added $125 billion to their assets last year. (A quick back-of-the-envelope calculation tells me that's the equivalent of roughly $3,400 per fellow American in poverty.)

No surprise, two Cascadians continue to figure prominently in the rankings. Bill Gates ($51 billion) and Paul Allen ($22.5 billion) rank number 1 and 3, respectively.

Elastic Fantastic?

Based on figures through August, per-capita gasoline consumption in British Columbia in 2005 has dropped to its lowest level since 1978, which is the earliest year for which records are available.  BC's gas consumption is on track to fall to 19.2 liters per person per week -- just a hair lower than in 1990 and 1991, but a significant landmark nonetheless.

Just as important, per capita gas consumption in the province seems to have fallen by about a tenth since its recent mini-peak, in 1998.  And it's down by about a third from its all-time peak in 1980.

In contrast, Washington residents use about 60 percent more gas, person for person, than do residents of BC.  Washington's current consumption is only down 17 percent from its all-time peak, and the fall from the most recent mini-peak, when gas prices were at a low point in 1999, has only been 6 percent.

What this suggests to me is that gasoline consumption may be a bit more elastic in BC than it is in Washington.  As this Slate article points out, gasoline consumption in the US is fairly inelastic:  people are fairly locked into their homes, cars, and jobs, and there's only so much driving that people can eliminate from their daily routines.  Only long-term shifts in where people live and work, and what they drive, can yield substantial reductions in gas consumption -- which probably means that gas prices will have to stay pretty high for a while until consumption falls appreciably.

But in BC -- especially in greater Vancouver, which comprises about half the province's population -- a growing share of the residents actually do have viable alternatives to the car.  Some folks who live downtown don't need a car at all; relatively compact urban design has placed stores and services in closer proximity to many people's homes; some people can walk or take public transport for some trips.  This all adds up to greater flexibility for at least some BC residents to adapt to higher gas prices -- and, as a happy coincidence, lower overall spending at the pump.

The Price We Pay

This is just a back-of-the-envelope calculation, but it looks as though the state of Washington is on track to spend about $9 billion this year on crude oil and natural gas.  That's about $25 million per day; or, over the course of the year, about $1,400 for every man, woman, and child in the state.

For the energy geeks out there -- this is based on spot prices for Alaskan crude through June; an estimate of  price increases through yesterday based on price trends for Texas light crude (see crude oil spot prices here); and natural gas sales and prices at the city gate, in 2004 and 2005 through May.  The latest figures I could find for total petroleum consumption were from 2001; I assumed we'll use about the same amount this year as 4 years ago.

And note that this is only tip of the iceberg for energy spending.  We spend still more on refining crude oil into gasoline and diesel; on fuel taxes; on delivering energy to our homes and workplaces; on converting natural gas into electricity; and so on.  But Washington -- like Oregon and Idaho -- produces not even a drop of petroleum, nor a whiff of natural gas, so every dollar that we spend on crude and natural gas gets shipped immediately out of the state.  Which means that oil and gas spending siphons off, oh, about 3.5 percent of the state's total economic output.

Just saying...

Logging Loses in Litigation

As long-time readers of this blog may know, Washington's Department of Natural Resources (DNR) is planning to aggressively boost logging in the state's forests.

But yesterday a King County judge blocked the DNR's logging plan on the grounds that it failed to adequately account for endangered species like spotted owls and steelhead. Apart from being a victory for conservationists--whose position was supported by the judge--the ruling is yet more evidence that the Sustainable Forestry Initiative (SFI) labeling isn't worth the paper it's printed on. (Despite weakening the definition of "old growth," reducing streamside buffers, and ratcheting up logging by 30 percent, the state still won SFI certification.)

For the time being, DNR must revert to its previous logging plan, which gives the state yet another opportunity to pursue meaningful certification--Forest Stewardship Council (FSC) labeling--for at least some of the public's forests. For more on that, here's an op-ed I wrote that appeared in the Seattle Post-Intelligencer last summer.

Light as a Feather; Stiff as a Board; Safe as an SUV?

Is a heavy SUV always safer than a light passenger car? Maybe not.

Recent research is challenging the long-standing belief that cars must be heavy to be safe. It turns out that the quality of the car may be just as important as the quantity of its bulk. Several studies show that design, safety features, and vehicle size (for crumple zones) can offset safety losses from reducing weight. And in addition to better fuel efficiency, lighter cars are also safer for other vehicles involved in an collision.

Carmakers have long argued that fuel economy standards compromise passenger safety because efficiency usually means lighter weights. And until recently government studies seemed to support the weight-safety tradeoff. But now it appears that other factors are as important as weight. There goes one more argument against improving vehicle fuel efficiency.

More Bang for Your Blog

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545 Leaps!

Hidden in the flurry of transit-related news hitting Seattle these days--everything from the closure of the bus tunnel to the bizarre death-gasps of the monorail--a minor success for sane transit was scored this week.

Word has quietly leaked out that Sound Transit's 545 bus began its new route through Capitol Hill over the weekend, the result of a long and intensive effort by Anirudh Sahni and other transit activists. "90% of the difficulty involved overcoming pre-conceived notions, the prejudices and biases of Sound Transit," Anirudh observed, "and getting them to undertake an objective examination of the trade-offs of changing the route. We'll see how it does."

It's reasonable to expect that this small step for the 545 represents a giant leap for Microsoft employees and others who live on the Hill but work on the Eastside. By making the bus far more convenient than a single-occupancy vehicle, a lot more commuters are likely to be on the bus and not adding to the already-clogged Evergreen Point Bridge.

The Endangered Act

As if the Endangered Species Act doesn't have enough problems right now. Federal records recently uncovered by reporters at the Seattle Post-Intelligencer show that the government may triple the amount of land where endangered plants and animals are protected not by the strictures of the Act, but instead by controversial Habitat Conservation Plans (HCPs).

In the abstract, HCPs sound like a good thing--they allow landowners to work out the details of a conservation program in exchange for a hands-off approach from federal regulators. But in practice, HCPs have proven to be a disastrously ineffective way to protect endangered species. In fact, recent investigative reporting at the P-I found that HCPs are often only loosely based on good science, the success of the plans are neither monitored nor tracked, the HCP program is badly under-funded, and the plans are virtually never enforced. In reality, HCPs can amount to carte blanche for landowners to harm species that are at serious risk of extinction.

So even while the Endangered Species Act is in danger of being emasculated by Congress, its current implementation is becoming ever-less effective. Depressing. Read all about it here.

Bus-ted!

A while back, the Seattle P-I ran a story about how Seattle's new diesel-electric hybrid buses weren't as fuel-efficient as advertised.  Our response was basically a shrug.  The chief benefit of hybrid buses, we argued -- particularly through the downtown bus tunnel, where many of Seattle's hybrids are routed -- is that they reducing pollution, not that they burn less petroleum.

Except now, a study from the University of Connecticut (via this post at Green Car Congress) found that GM's hybrid buses really may not actually reduce pollution coming from the buses' tailpipes.  In fact, driving identical routes, the standard diesel buses seemed to emit a bit less particulate matter (a particularly nasty problem for diesel engines) than the hybrid buses.

This, of course, comes as a surprise -- the air in Seattle's bus tunnel's has seemed surprisingly pleasant to me, even after the city switched from all-electric to hybrid buses through the tunnel.  So I'm not sure what to make of it.  But still, there's probably a lesson to be learned here:  you have to be really careful not to be sucked into the hype surrounding new technologies. Sometimes the benefits don't pan out until the technology is refined; and other times, the benefits may never materialize at all.