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Politics : Politics for Pros- moderated
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From: TimF7/12/2007 6:56:08 PM
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Where Externalities Lie

Don Boudreaux

Here's a letter that I sent today to the Wall Street Journal.

To the Editor:

Like many others, Professor Hendrik Van den Berg insists that "we need to raise the price of gasoline by introducing a tax that reflects the congestion, environmental and national security costs of oil" (Letters, July 3). I disagree.

First, government already taxes oil production and gasoline. How does Prof. Van den Berg know that the current level of taxation is inadequate? Second, government itself is a steamy swamp of negative externalities. Not only do politicians and bureaucrats spend other people's money, they do so overwhelmingly while under the influence of special-interest groups. The only tax that we should raise is one that increases the cost of using government.

Sincerely,
Donald J. Boudreaux

I am consistently amazed at the way so many persons -- including (especially?) economists -- cleverly identify real or imagined externalities in private markets and then propose political "solutions" for these alleged problems as if the government officials who will design and implement these "solutions" are wise, well-informed, and pure of motive.

cafehayek.typepad.com
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