Wednesday, June 17, 2009

Tax Cellphones, Carbon, Cigarettes, Calories

California has 10M cars on the road. On an given day about a third of them use a cellphone despite laws prohibiting the use of non hands-free cellphones while driving. Why? Duh, it's only a $20 fine. Littering is a $1000 fine in California and many other states. The next time you are on the road, count the number of people driving illegally with a phone glued to their face vs. the number throwing trash out the window. The penalty for littering is 50 times the penalty for a behavior that kills and injures people every day. A $1000 fine would initially bring in hundreds of millions of dollars to state coffers. That money could replace state funding taken away from schools, fire departments and police. But pulling people over is dangerous and time-consuming. Maria Shriver's cellphone vehicle violations are well known because the paparazzi have her on tape. One cop with a camera could generate $1M in fines in a single weekend.

Thomas Friedman, columnist for the NY Times, suggested that gas should be $4.00/gallon forevermore. The price spike in the late 1970s forced Europe and Japan to adapt with efficient mass transit. We didn't, and we were even more unprepared for $140/barrel oil in 2008. Elon Musk, CEO of Tesla, has called for $10/gallon gas, based on behavioral change at the global level. "No one explicitly pays for the destruction of our atmosphere and the warming of the world's oceans". American burns ~375M gallons of gas every day. Changing that will take time and technology. A carbon tax could fund the technology. Obama's Cap and Trade proposal has become a watered down political mess. California should take the lead will real reform by directly taxing carbon. (And gain relief from Cap and Trade because we get most of our electricity from non-polluting sources.)

California democrats proposed higher cigarette taxes as one way to fix the budget deficit. Cigarette consumption is a behavior that implicitly costs everyone though the burden of health care. Cigarettes kill more American every week than the war in Iraq has - to date. Insurance companies pass the cost of $100,000/year cancer treatment on to their other clients. We subsidize cigarette smoking through our insurance premiums. Heart disease and related complications (diabetes) kills more Americans every day than the war in Iraq. The costs are enormous, and we all pay, one way or another. It is time to tax nutritionally devoid calories - high-sugar drinks and high-fat "value meals".

updated Nov 1, 2009

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