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    <title>The Benefits of a Gas Tax</title>
    <dc:date>2012-03-05T19:02:15+00:00</dc:date>
    <link>http://economistsview.typepad.com/economistsview/2012/03/the-benefits-of-a-gas-tax.html</link>
    <dc:creator>rahuldave</dc:creator><description><![CDATA[MIT energy economist Christopher Knittel says a gas tax would pay for itself,  or nearly so, with the benefits the tax would bring:

Fuel for  thought, by Peter Dizikes, MIT News Office: ...Christopher Knittel ... is  the William Barton Rogers Professor of Energy Economics at the MIT Sloan School  of Management...  Knittel’s research addresses a clutch of practical and linked questions: How  much progress have automakers made on fuel efficiency? (More than you might  think.) How do car owners respond when fuel prices rise? (They really do ditch  their gas-guzzlers.) How large are the collateral health benefits of removing  dirty vehicles from the nation’s fleet? (Very large.) ...
One of his papers, “Automobiles on Steroids,” recently published in the American  Economic Review, examines technological progress in the auto industry. From 1980  through 2006, the fuel efficiency of America’s vehicles has increased by just 15  percent — at first glance, a lethargic rate of improvement. But as Knittel  points out, cars’ average horsepower has roughly doubled since then, and average  curb weight of those vehicles rose 26 percent... Adjusting for  these changes, fuel economy has actually increased by 60 percent since 1980, but  as Knittel observes, “most of that technological progress has gone into  [compensating for] weight and horsepower.”   On the stagnation of overall fuel efficiency since 1980, Knittel adds, “It’s no  fault of the manufacturers and consumers. Firms are going to give consumers what  they want, and if gas prices are low, consumers are going to want big, fast  cars. If you’re going to blame anyone, it’s the policymakers for not creating  the incentive structure for putting that technological progress into fuel  economy.”  Pain at the pump  Cars and light trucks produce about 15 percent of U.S. greenhouse gases. The  best policy for reducing energy consumption from those sources, Knittel  believes, would be higher fuel prices. “That would incentivize all the things we  want,” Knittel says. “When gas prices go up, people shift to more fuel-efficient  cars, they drive fewer miles, and insofar as there are lower-carbon-intensive  fuels out there, people shift to them. They get rid of their clunkers faster.”  That’s not just an assumption; Knittel has studied the responses of auto owners  nationwide to rising gas prices from 1999 to 2008 in another research paper,  “Pain at the Pump,” co-authored with Meghan Busse and Florian Zettelmeyer of  Northwestern University. The researchers found that with each $1 rise in the  price of gas, purchases of highly fuel-efficient autos increase 21 percent,  while purchases of gas-guzzling vehicles drop 27 percent.   A shift to newer, more fuel-efficient vehicles would actually help people in  another way, besides releasing fewer greenhouse gases: It would reduce the  amount of harmful local pollution in the air, as Knittel detailed in a paper  written with Ryan Sandler of U.C. Davis, based on a study of California from  1998 to 2008. “When gas prices go up, you’re getting bigger mileage reductions  from cars that are worse in terms of these pollutants,” Knittel observes.   That produces significant health benefits beyond the problems associated with  climate change. “We’re talking about asthma attacks and respiratory problems,”  he adds. “This isn’t just a matter of helping the world two generations from  now. You can point to this and say, ‘Here is a more immediate, salient reason  for a gas tax.’” According to Knittel and Sandler, 70 percent of the costs of a  gas tax of $1 per gallon could be recouped by immediate health benefits from  reduced pollution. Other possible benefits from the tax — reductions in climate  change, traffic congestion and accidents — could make it a net winner for people  in economic terms alone.  But will politicians ever impose higher gas prices on a financially stretched  public? A variety of powerful lobbying interests in Washington oppose such a  move — and Knittel knows hardball when he sees it. Indeed, Knittel is examining  the financial rewards industries reap from their lobbying efforts in some of his  current research. Still, he does retain a sense of optimism. “The idealistic  academic in me says that the more you broadcast the truth, the more likely it  will be to win out,” Knittel says. “But we’ll see.”
See also Ryan Avent who comments  on related research.
]]></description>
<dc:subject>Economics Environment Market_Failure Taxes</dc:subject>
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<item rdf:about="http://feeds.gawker.com/~r/lifehacker/excerpts/~3/sUnO6gZ0nDA/tax-write+off-cheats-that-you-wont-feel-too-guilty-about">
    <title>Tax Write-Off &quot;Cheats&quot; That You Won't Feel Too Guilty About [Tax Time]</title>
    <dc:date>2011-02-16T16:00:00+00:00</dc:date>
    <link>http://feeds.gawker.com/~r/lifehacker/excerpts/~3/sUnO6gZ0nDA/tax-write+off-cheats-that-you-wont-feel-too-guilty-about</link>
    <dc:creator>rahuldave</dc:creator><description><![CDATA[

Write off "business pet" expenses, deduct the costs of volunteering your time, and expense home improvements: a former IRS officer lists at Get Rich Slowly quite a few clever ways to "cheat" on your taxes. [Get Rich Slowly]More »

   
]]></description>
<dc:subject>Tax_Time in_brief Money Personal_Finance Saving_Money Taxes Write-offs</dc:subject>
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    <title>Paul Krugman: Block Those Metaphors</title>
    <dc:date>2010-12-13T06:02:44+00:00</dc:date>
    <link>http://economistsview.typepad.com/economistsview/2010/12/paul-krugman-block-those-metaphors.html</link>
    <dc:creator>rahuldave</dc:creator><description><![CDATA[I the tax deal a good deal?:

Block  Those Metaphors, by Paul Krugman, Commentary, NY Times: Like it or not —  and I don’t — the Obama-McConnell tax-cut deal, with its mixture of very bad  stuff and sort-of-kind-of good stuff, is likely to pass Congress. ... The  deal, we’re told, will jump-start the economy; it will give a fragile  recovery time to strengthen.
I say, block those metaphors. ... Our problems are longer-term than either  metaphor implies. And bad metaphors make for bad policy. The idea that the  economic engine is going to catch or the patient rise from his sickbed any  day now encourages policy makers to settle for sloppy, short-term measures  when the economy really needs well-designed, sustained support. ...
What we’ve been dealing with ... is a painful process of “deleveraging”:  highly indebted Americans not only can’t spend the way they used to, they’re  having to pay down the debts they ran up in the bubble years. ...
What the government should be doing in this situation is spending more while  the private sector is spending less, supporting employment while those debts  are paid down. And this government spending needs to be sustained:...  spending that lasts long enough for households to get their debts back under  control. The original Obama stimulus wasn’t just too small; it was also much  too short-lived, with much of the positive effect already gone. ...
But wouldn’t it be expensive to have the government support the economy for  years to come? Yes, it would — which is why the stimulus should be done  well, getting as much bang for the buck as possible.
Which brings me back to the Obama-McConnell deal..., the tax-cut deal is  likely to deliver relatively small benefits in return for very large costs.  ... Tax cuts for the wealthy will barely be spent at all; even middle-class  tax cuts won’t add much to spending. And the business tax break will, I  believe, do hardly anything to spur investment given the excess capacity  businesses already have.
The actual stimulus in the plan comes from the other measures, mainly  unemployment benefits and the payroll tax break. And these measures (a)  won’t make more than a modest dent in unemployment and (b) will fade out  quickly, with the good stuff going away at the end of 2011.
The question, then, is whether a year of modestly better performance is  worth $850 billion in additional debt, plus a significantly raised  probability that those tax cuts for the rich will become permanent. And I  say no.
The Obama team obviously disagrees. As I understand it, the administration  believes that all it needs is a little more time and money, that any day now  the economic engine will catch and we’ll be on the road back to prosperity.  I hope it’s right, but I don’t think it is.
What I expect, instead, is that we’ll be having this same conversation all  over again in 2012, with unemployment still high and the economy suffering  as the good parts of the current deal go away. The White House may think it  has struck a good bargain, but I believe it’s in for a rude shock.
 
]]></description>
<dc:subject>Economics Politics Taxes</dc:subject>
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<item rdf:about="http://lifehacker.com/5516193/irs-planning-more-audits-this-year-know-what-to-do-if-youre-audited">
    <title>IRS Planning More Audits This Year; Know What to Do If You're Audited [Tax Time]</title>
    <dc:date>2010-04-13T18:00:00+00:00</dc:date>
    <link>http://lifehacker.com/5516193/irs-planning-more-audits-this-year-know-what-to-do-if-youre-audited</link>
    <dc:creator>rahuldave</dc:creator><description><![CDATA[





The IRS plans to make more audits this year in order to make up for budget deficits. Rather than immediately surrender to the audit, the Wall Street Journal offers some tips for dealing with the government tax agency.More »

   
]]></description>
<dc:subject>Tax_Time Finance Financial Money Personal_Finance Taxes</dc:subject>
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