Monday, December 29, 2008

David Henderson spanks Tom Friedman

and good, on the notion of a gasoline tax:
Friedman doesn't seem to understand that to make a case for a tax on the grounds he wants to make it, that is, that it would enhance our prosperity, he needs to make one of two arguments. Either he would need to argue that using gasoline imposes an externality that is so large that the current disproportionately high gasoline tax is too small or that for a given amount of revenue raised, the deadweight loss per dollar raised from an increase in the gasoline tax is less than the deadweight loss per dollar from raising other taxes. Friedman doesn't even try.

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