Wednesday, May 6, 2009

Trucks and Trade

Anyone know that there is a 25% tariff on "motor vehicles for the transport of goods" and the tariff on regular autos is just 2.5%? Check this out. Maybe that's also keeping us from showing much real innovation in the auto industry generally. Can't make a better hybrid? Make more gas-guzzling trucks with the complements of tariff protection.

It also makes me more frustrated about trucks. I've always wanted some sort of fuel-inefficiency tax (instead of binding restrictions) on gas-guzzlers, especially trucks. The response I get is that well, we can't tax commercial trucks more than passenger cars because farmers and other workin folks use them - it's not "fair!" Well, now it turns out we ALREADY have a higher tax on pickemup trucks than cars, so all we'd really have to do to apply the appropriate "incentives" (in this case sticks) to nudge production is: (1) make the tax nondiscriminating (apply equally to foreign and domestic producers instead of a tariff); (2) progressively tax inefficient cars at higher rates up in reverse proportion to their mpg rating and emissions.