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09 June 2009 @ 01:48 pm
 
Here's a piece I just posted on my WalkBoston blog that I feel really strongly about, for those who are interested in such things: The evils of externalized costs and what it means for transportation in Massachusetts
 
 
I'm feeling: frustratedfrustrated
 
 
 
Jasonjd_trouble on June 9th, 2009 06:23 pm (UTC)
People believe that those externalities don't cost anything, but reaction is ALWAYS more expensive than proaction.

It's like paying for the costs of people who don't have health insurance who go to the ER for primary care. Do the people who have fancy health insurance think that they don't in some way already pay for that VERY expensive reactive care?
ruthless compassion: martini handsaroraborealis on June 9th, 2009 06:25 pm (UTC)
Right, exactly. I basically feel like all (or at least a good number of) the world's ills could be solved by internalizing costs that are currently externalized. The whole invisible hand of the market argument would certainly be more compelling in that case!
drwexdrwex on June 9th, 2009 07:03 pm (UTC)
I like your point
and thank you for linking.

I'm not sure if you read fivethirtyeight or not, but they recently had a blog entry with much the same theme comparing such ideas as raising the tax on beer versus charging people arrested for DUI what it actually costs to deal with DUIs, which comes to something like eight THOUSAND dollars per incident.
ruthless compassion: martini handsaroraborealis on June 9th, 2009 07:26 pm (UTC)
Re: I like your point
I don't, but perhaps I should! Yes, that's another example. I actually think that charging people for the cost of DUIs would be an error, for a couple of reasons:

1. It's unlikely that everyone would be able to pay, so collection would be difficult.

2. It penalizes only those people who get "caught", when, in fact, lots of people drive drunk without having an accident.

On the other hand, of course, taxing beer also penalizes people who drink beer and don't drive. It's an interesting dilemma!
drwexdrwex on June 9th, 2009 07:43 pm (UTC)
Re: I like your point
I think those are good points, but bring up an interesting question - is there really a cost for a DUI who doesn't get caught? Who gets home without causing any harm or damage? It's a tough call for me to make because on the one hand I think it's a person doing something incredibly hazardous that should not be legal, but on the other hand if nobody's harmed I have a harder time crying foul.
ruthless compassion: martini handsaroraborealis on June 9th, 2009 07:47 pm (UTC)
Re: I like your point
I hear what you're saying, but I think I see it differently. Is the person who gets caught doing anything more wrong than the person who doesn't? If our goal is to punish people, then we should make people who get caught pay. If our goal is to discourage behavior that's harmful to the public health, then we should make everyone pay in.
drwexdrwex on June 9th, 2009 08:02 pm (UTC)
Re: I like your point
Yes, I see your point and I think that's a valid set of distinctions. But I don't know how to link that back to your original point. Because in this case I have a very hard time drawing the circle around the set of people who ought to pay. Teetotalers? Underage persons? Seems hard to see how a pay in system would change those behaviors. Or even people who are conscientious about having a designated driver or using a taxi.

It feels like this is a case where we can't so much assign costs as create an incentive system for culture-wide behavior change. Your other article, about the common resource of the transit infrastructure, seems like a much clearer case for common use and common benefit from paying in.
ruthless compassion: martini handsaroraborealis on June 9th, 2009 08:31 pm (UTC)
Re: I like your point
Oh, yeah, this thread is topic drift, certainly :) And I'm sure that in the drinking/sin tax/DUI discussion, there are other factors I don't know about. But, in general, it does apply to my general desire that we be more strategic about taxes to encourage/discourage behavior that benefits the common good.

Of course, reaching consensus on what is the common good is its own problem :)
Katefenicedautun on June 10th, 2009 02:37 pm (UTC)
Re: I like your point
In economics, you can actually work out that all people who drink and drive have a cost, which is the chance of being caught times the penalty (or value of, including time lost etc) plus the chance of not being caught by that cost ($0). So even though you don't catch everyone, you are penalizing everybody (sorta). It's the same rationale as speeding tickets.
Misanthropic extrovertdbang on June 10th, 2009 12:13 am (UTC)
In general I agree with you (as I think you know).

But one thing that springs to mind is that this is a very complicated model to actually implement.

If you are to internalize the costs, then presumably you must also internalize the..er...whatever the opposite of costs are in context. profits? benefits?

The existence of roads benefits everyone -- both people who use them directly, and people who don't, but purchase goods that were shipped in on those roads, or send their kids to schools where the teachers arrived by road, etc. How do we proportionately assign the costs to those who reap the benefits when the benefits are so large and hard to define?

While I'm no libertarian, I remember finding an essay I read in social work school by Milton Friedman (I think) very compelling, in which he argues that certain things have such broad-reaching benefits that providing those is a valid function of government and taxes were a valid way to pay for them...he used roads specifically as an example of one of the few things where taxing non-users was valid.

So...very complicated. :-\
ruthless compassion: martini handsaroraborealis on June 10th, 2009 02:42 am (UTC)
I'm not sold.

Even if I don't drive (and thus pay gas taxes), I will pay them by extension as the transportation costs of goods and services that I use increase due to shippers, etc, increasing their rates to cover their increased costs, etc.

I agree that the transportation system has such broad-reaching benefits that government should provide them, obviously, and I see gas taxes as a good way to fund them. It's certainly possible that there's a good argument to tying transportation funding to another source, but the (regressive) sales tax makes no sense at all.
Misanthropic extrovertdbang on June 10th, 2009 02:47 am (UTC)
I agree a sales tax is regressive. So is a gasoline tax, for the same reason: low and moderate income households pay a disproportionate amount of their income on basics like gas as compared to high income households.

Really, I'm not arguing against a gas tax -- it seems reasonable -- but I have reservations for this reason. It seems without question better than sales tax though.
Katefenicedautun on June 10th, 2009 02:40 pm (UTC)
Actually, I believe that a gas tax is generally more regressive outside of the metro area (for example, western Mass) because the sales tax does not include groceries (I think) or rent/utilities/healthcare, and gasoline is the third big necessity for poorer families in more rural areas. Or at least, that's the only argument I heard against a gas tax that sounded reasonable/sane.
Doug Orleansdougo on June 10th, 2009 02:55 am (UTC)
Huh, I thought libertarians wanted all roads to be toll roads.
Misanthropic extrovertdbang on June 10th, 2009 03:00 am (UTC)
The point of this particular essay (I can't remember the name of it) was *against* that line of thinking.

The theme is: what is and is not a valid function of government and use of taxes. His argument was that paying for those things such roads, where the benefits are nearly universal, and the "internalization" of costs nearly impossible to assign fairly, are in fact one of the few valid things the government may spend public funds on.