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by paganel
1228 days ago
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It also adds to the price of food that gets transported from one place to another, and, as such, acts as a regressive tax on people who pay the biggest part of their income on their basic needs (like food). That's one of the main reasons why I don't get the "death to cars!" movement and why I regard it as mostly middle-class privileged discourse: no cars means fewer or worst roads, means food being a lot more expensive. |
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If we subsidize road transport by letting tax payers or commuters pay for their road wear and tear, we end up with more road transport at the cost of more labor and more energy use. That's deadweight loss caused by the government distorting the market with road subsidies.
Road transport should be used where its flexibility gives it a competitive advantage, not be the default because taxpayers subsidize it.
One way to compensate lower-income earners for higher food prices is to lower taxes for those with low incomes, making the tax rate more progressive. Another is to reduce VAT for basic needs products like food.