Pigovian Taxes May Offer Economic Hope – NYTimes.com.
This proposal mirrors the fee-bate concept in the Drive+ legislation that Gary K. Hart introduced in 1989/1991 (and that Ken Goldsholl and I initiated):
“Yet, in principle, any change that makes the economic pie larger makes it possible for everyone to enjoy a bigger slice than before. The practical challenge is to slice the larger pie so that everyone comes out ahead. A first step toward a vehicle-weight tax would be to make it revenue-neutral — for example, by returning its revenue in the form of lump-sum rebates to each buyer. That would soften the blow, while preserving the incentive to buy lighter vehicles.
For example, if the tax were 20 cents a pound, a 6,000-pound vehicle would be taxed at $1,200, as opposed to $800 for a 4,000-pound one. If an equal number of vehicles of each weight were sold, all buyers would get a $1,000 rebate when the total tax income was redistributed. The buyer in our example would thus be making a net payment of $200 because of the tax, but his total outlay would have been $400 lower if he’d bought the smaller vehicle instead.”