Arnold Kling

A Good Tax

Arnold Kling, Great Questions of Economics
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Most taxes are distortionary, causing a loss of economic well-being. But sometimes, a tax can improve welfare by reducing the discrepancy between private and social cost. Brad DeLong points to a classic illustration of such a welfare-improving tax, describes in The Guardian

Next month will see "Big C" day - the introduction of a 5 congestion charge for everyone (almost) who drives into central London. The capital's dwellers will find 700 cameras, computerised fines, hit squads authorised to seize the cars of non-payers and 80 checkpoints round the city centre.

Economists love tolls, and my guess is that many of us are rooting for this London toll to succeed.

Discussion Question. How is technology evolving to make it easier to turn roads into toll roads?

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