In comments to PGL’s post, Greg Mankiw writes:
“If I were auditioning for the National Review, do you think I would be using my blog to advocate an increase in gasoline taxes?”
Some of you may remember my post on Arnold Harberger a few weeks back. Now, I was reminded of Harberger again when I read Mankiw’s comment. If it wasn’t clear from my previous post, I think Harberger is brilliant. He simplifies amazingly well, cutting right down to the bone but no farther. Its milimetric precision, and he does it very quickly. But one thing that is clear to anyone who knows who Harberger is – nobody sane, not even a Pinochet, would ever confuse him with a liberal.
And yet… unless I’m hallucinating, I remember Harberger saying in class that the thought there should be a large tax on gasoline. I think he specifically mentioned an additional $3 per gallon. In fact, I remember arguing with him about it both during and after class. For context, this would have been about 1992 or 1993. And I remember having the same discussion with him in his office a couple of years later – probably around 1995.
Now I’m not about to say that a tax on gasoline is a popular position among conservatives, or even among conservatives who know their economics. But, here is an example of two economists, both of whom are at least very, very good (even if I personally think one made the decision to become a hack – and I’m not talking about Harberger) who support a specific tax. And it is a tax that many liberals might not support. I personally would support a higher tax on gasoline… $3 a gallon (in 1993 dollars) higher, well, I’m not sure. I’ve never run any numbers.
So what gives?