Indeed. I think a recent IMF study suggested the U.S. would have to raise taxes $500B annually to account for pre- and post-consumer 'subsidies', mostly to compensate for externalities.
In U.S. budget-ese, you describe costs over a 10 year span, so that's a "$5 trillon tax hike".
The point being that the EV subsidy is small potatoes. I still think it's a bad idea. Tax the gas. Let producers and consumers figure out how to use less, and let governments figure out how to compensate for the regressiveness of the tax.
How much and to whom? Some poor people drive a lot. Some poor people don't drive at all.
EDIT: Also, you can't just give it all back. As long as emissions continue at something near current levels, you have to spend it on amelioration. It doesn't just become a slush fund.
I'd say as much of it as we can, equally per-capita.
> Some poor people drive a lot.
And either they will change their behavior, or be hurt less than if we didn't give the money back. As people generally change their behavior they will likely have more options, as demand rises for alternative modes of transportation (and for goods and services that involve burning less gas) leading to greater economies of scale.
> Some poor people don't drive at all.
But they still buy goods that were shipped by burning gas. Even so, they'll benefit more than others, but I don't think that's a problem.
> Also, you can't just give it all back. As long as emissions continue at something near current levels, you have to spend it on amelioration. It doesn't just become a slush fund.
We can certainly talk about taking a piece for amelioration, but I don't think paying that out of the general fund is unrealistic; it's what we'd be doing otherwise, and it'll be way cheaper if people have adjusted their behavior to reflect the true costs of their actions.
Why? Just give it back equally, and finance amelioration out of general revenue. (Not saying that's a good idea. You could finance amelioration out of a specific percentage of that tax.)
I suspect that would cause problems for the urban poor. Possibly also anyone for whom food makes up a large proportion of their annual budget, given both how reliant growing and transporting that is on oil and how reliant farmers are on internal-combustion vehicles.
Unfortunately, I'm not finding the numbers I need to get a good estimate. The important question is what portion of petroleum use winds up servicing those poor people versus the rest of the economy, because while it is certainly true that a small percentage increase in the costs of necessities hurts these people disproportionately, the money returned is a much greater portion of their income, and could very well dwarf the increased costs (indeed, this is what I would expect).
The very worst case, of course, is any who find themselves paying higher prices but unable for whatever reason to access the stipend.
In U.S. budget-ese, you describe costs over a 10 year span, so that's a "$5 trillon tax hike".
The point being that the EV subsidy is small potatoes. I still think it's a bad idea. Tax the gas. Let producers and consumers figure out how to use less, and let governments figure out how to compensate for the regressiveness of the tax.