Saturday, July 14, 2007
Raise Alcohol Taxes, Save the Planet
A doubling of the US federal alcohol tax would restore it, in real terms, to about the level that it stood at in 1974. And I think that there is much to be said for an alcohol tax hike. Nevertheless, it would probably require a much more significant tax hike before the US could avail itself of a benefit that very-high-alcohol-tax Sweden has uncovered: improving the environment. It's quite simple, really. First, you institute those really high alcohol taxes. Then, as folks attempt to smuggle untaxed alcohol into your country from abroad, you seize the occasional smuggled shipment. Then, you dispose of the confiscated hooch by giving it to a biofuels firm that converts the beverage alcohol into enviro-friendly fuel. Then you power trucks and busses with the alcohol-based biogas, so smugglers and customs agents can operate more cheaply. The policy is not only win-win, it violates the Second Law of Thermodynamics. (OK, maybe the smugglers aren't winners, and then there are all those Swedish citizens who are paying huge prices for a glass of wine with dinner.)
I wonder if the Finns hit on that idea?