This is the Cato Daily Podcast for Tuesday, August 7th, 2007.

I'm Caleb Brown, as the U.S. House seeks to punish oil companies with billions of dollars in new taxes and economists push

for higher taxes on gasoline to recover costs associated with pollution.

Are higher gas taxes the best way to address concerns about pollution?

Cato Institute Senior Fellow Jerry Taylor says no.

In a policy analysis written with Peter Van Doren, Taylor articulates reasons why

federal gas taxes should not only not be raised but

should be eliminated.

The economist Greg Mankew and others are pushing for higher gas prices to recover

certain costs associated with air pollution.

You say yourself that environmental damage associated with driving vehicles does constitute

a market failure, but you oppose these kinds of taxes. What do you see as wrong with the

Bagovian taxes on gasoline?

Because they're taxing the wrong thing.

If you want to tax pollution,

you want to internalize that externality by taxing and what you do is you tax pollution.

You don't tax fuel consumption because it turns out that different cars have different impacts

on the environment depending upon how well they're maintained.

It turns out that even that just a small percentage of the cars on the road contribute a significant

amount of the air pollution just because they're not well maintained and they're

older cars or what have you and so if you tax gasoline trying to get at

pollution you will be grossly over taxing some people and grossly under taxing other

...