[1] - https://www.motortrend.com/news/2026-mercedes-benz-baby-g-wa...
Just like code, regulation isn't intrinsically valuable - it's a means to an end, and piling lots of poorly-written stuff on top of each other has disasterous consequences for society. We have to make sure that the code and law that we write is carefully thought out and crafted to achieve its desired effect with minimal complexity, and formally verify and test it when possible.
(an example of testing law may be to get a few clever people into a room and red-team possible exploits in the proposed bill or regulation)
It seems that the goal is to pressure automakers to improve the efficiency across their entire line instead of simply banning low-efficiency models altogether.
If an automaker discontinues a low-efficient model in order to have access to a market, isn't this an example of regulation working well?
> so the little Jimny is emitting 146g/km but somehow there is no problem to buy a G-Class that is emitting 358g/km
This is an example of a manufacturer discontinuing a more efficient vehicle while continuing to sell a larger vehicle that is significantly less efficient.
That's the opposite of what you want. So, no, this is not an example of regulation working well.
The spirit was surely be too accelerate efficiency by ensuring all manufacturers improve. That has been negated; reducing the necessary efficiency for some manufacturers just because others are doing well.
It's like if you allowed multiple people to mix blood samples for a DUI check. Sure, there'd have to be less drinking over all, but some would still be drunk af and the effectiveness of the law would be greatly reduced.
All local industry distorts their relevant politics. There’s lobbyists in the EU too.
The EU economy has a lot of car manufacturing, so cars are probably a big deal in Brussels.
And Germany is fairly influential in the EU so they probably extend the protection of these companies to the EU level.
Car manufacturing is a strategic component of a nation's defense infrastructure. It goes way beyond trade protectionism.
https://www.schmidtmatthias.de/post/mercedes-benz-intends-to...
isnt that a VW made in Poland?
The situation here is pathetic. We can't have truly small trucks or sport-utes because of obviously incompetent or corrupt regulations.
It's like complaining that you bought a boat, but the water surrounding them is dangerous and you could drown in it. So we need to make it work on land so that you can take the kids to school in it without drowning.
Related note: I just saw a Suzuki Sidekick on the road in L.A., in Geo Tracker trim... a rare sight nowadays. It sounded like shit, but with a robust platform a vehicle like that would be just what the U.S. market lacks: a burly SMALL sport-ute.
1. Poorer people tend to drive older vehicles, so if you solely encourage higher fuel economies by taxing carbon emissions, then the tax is (at least short-term) regressive.
2. You can work around #1 by applying incentives for manufacturers to make more efficient cars should lead any carbon tax
3. If you just reward companies based on fleet-average fuel economy without regard to vehicle size, then it would be rather bad for US car companies (who employ unionized workers) that historically make larger cars than Asian and European companies.
4. So the first thing done was to have a separate standard for passenger vehicles and light-trucks, but this resulted in minivans and SUVs being made in such a way as to get the light-truck rating
5. We then ended up with the size-based calculation we have today, but the formula is (IMO) overly punitive on small vehicles. Given that the formula was forward looking, it was almost certain to be wrong in one direction or the other, but it hasn't been updated.
Every single one of your ideas has problems that are solved by a carbon tax. Taxes are simple, they accomplish what you want, and they don't have loopholes. A carbon tax will _never_ have the unintended consequence of making emissions worse. Many of our current regulations, including the one I was responding to do exactly that because they actually cause people to buy larger trucks than they otherwise would with worse fuel efficiency.
A carbon tax might not on it's own be enough to solve the problem (especially if you set it to low), but no matter what level you set it, it will help. Thanks to unintended consequences, many of our current regulations are actively counter productive, while _also_ having negative economic and other costs.
Shifting cost to the emitters is a better way to put it. If a factory can make 10m in upgrades over time to reduce their carbon tax burden by 15m over time, they are definitely going to do it. So I disagree: I say it does change behavior and it does reduce actual carbon.
> There's a lot more low-income emitters than high income ones
Whether that's true or not it does not mean a carbon tax would not 'reduce actual carbon'.
An ICE vehicle sitting in a driveway with its engine off emits no pollution (that is, after the initial impact of manufacturing and delivering it).
However, the part where the resulting revenue is pooled and payed out in an equal amount back per capita is progressive, since that payment is a greater fraction of a low income. Desirably, it also means that low-income people emitting less than the average would make money overall: consider a household consisting of a single mom and two kids that take public transit to work/school.
If you set the carbon tax at about $1/gallon of gasoline, the corresponding carbon rebate would be about $1000 per family per year.
That wouldn't affect rich people much; neither the $1/gallon nor the $1000 extra income is significant. But many rich people get rich by being penny-wise, so many would change behaviour, by buying an EV or similar.
But for poor people both $1/gallon and $1000 per year is significant. If gas was $1/gallon more expensive, poor people definitely would drive less.
I'm poor. I could get just the $X back as my carbon tax dividend and continue with my current lifestyle. Or I could make choices that emit less carbon, which will cost less since they don't have a carbon tax cost to them, and save an additional $Y on top of the $X I'm already getting.
What do I do?
The government's job is to say that in aggregate, they people better off from the overall reduction in carbon emitted.
My opinion is that trying to make consumption taxes non-regressive is a fool's errand. If it needs to be progressive, figure out what the total dollar contribution needed and pick a rate that when scaled with incomes yields the outcome needed.
Let's say that instead of taxing carbon, we pay people a bonus for emitting a below-average amount of carbon (proportional to the amount that they are below average by). If the amount is in a certain range, it will be too small an amount for wealthy people to care about, but large enough for poorer people to do things within their means (e.g. carpooling) to try to get it.
The results would hit certain geographic areas much worse than others, and (if priced enough to change behavior) would also probably depress car sales, which are two reasons why the federal fuel tax has been flat for over 30 years.
I believe this would be more fair to children who are the ones who will be most impacted by climate change in the end.
I believe there are even some governments that use this approach, but many of them don't make it feel as significant as it should. You should get a big fat cheque in the mail every month as if you won the lottery.
"Taxes are simple... and they don't have loopholes" is not at all how taxes work in the US. Perhaps your imagined perfect carbon tax is simple, but a simple tax with no loopholes is not likely to happen. Everyone wants a break or exception, and many of the interested parties are powerful.
You could say the same thing about zoning. Higher density is better for affordability, but faces opposition from landowning existing residents. Does that make it wrong, or not worth pursuing? No, and that particular movement seems to be getting traction despite the political opposition.
I read "trivially fixable" as "there is an elegant solution to this," not that "it is easy to get it politically passed."
> I read "trivially fixable" as "there is an elegant solution to this," not that "it is easy to get it politically passed."
The huge problem with this line of thinking is that it's easy to identify a half-dozen key players standing in the way of your elegant solution and it would be easier to remove them from the situation than change their minds. It's an attractive idea that can become a fixed idea.
In an ideal world, I'd like the tax to be made more progressive, but I'll take anything!
I'd like to see a carbon tax coupled with massive investments to make public transit legitimately good. There are too many places where there is no viable alternative to driving, a carbon tax will unnecessarily punish those people without giving them a reasonable alternative.
Government ‘carrots’ are almost universally a terrible idea because they codify specific solutions. Instead you can get the same effect more efficiently with a carbon tax large enough for people to notice.
Unfortunately, poor people don't have the cash on hand to hold them over until they get their Carbon Stipend on April 15th.
It's going to hurt poor people to charge them more at the counter, even if you give them more later. The stipend is just going to end up paying for less than the interest the tax created on a credit card.
Why would you think so? People driving older cars, not being able to afford to fly - will certainly spend more money on fuel for their car.
Maybe they drive a more efficient car, but they own much larger houses which are heated or cooled consistently, they travel a lot more, and they buy things with embodied carbon emissions.
I'll boil it down to:
If you want less of something, tax it.
I don’t think that level is sufficient to cover the externalities.
You give it back to poor as a income-phased out refundable tax credit. Crucially, base it not on how much they drive or consume, but on their income.
Name it something like the "Worker's Energy Credit". In the worst case, it cancels out the carbon tax spent by them commensurate with their lower income.
In the best case poor people who don't drive much actually come out ahead, and it's just a very progressive sales tax.
The rich might hate it, and call it "redistribution", which is fine because that's exactly what it is, and what taxes have always been, but this one would redistribute downwards instead of upwards, and incentivize lower carbon emissions by those who can afford it.
They do buy smaller cars. But they still spend a much greater percent of their income on gas. Worse, most of the auto industry has upsized their entire vehicle fleet. It's not as easy to find small used cars as it once was. They also are less likely to have jobs they can remote work, and can't afford to live close enough to the workplace to use transit.
Also many poor people need a larger car for their work. I'm not talking about a vanity pickup, but something more like a small pickup or a work van. Others may have many children to drive (maybe their own and others if they live in joint family situations).
Their solution is to buy a 3rd or 4th hand large vehicle.
Personally, I think it’s letting the perfect be the enemy of the 99+% perfect.
Larry Page would be pumped. His annual salary is $1.
I feel pretty strongly that adding exceptions and loopholes to taxes only benefit wealthy people, which is the opposite of the intent.
I would be interested in reading a study where all the tax laws in the country were burned down and rebuilt, with no loopholes or exceptions. Also, eliminate borrowing against a stock portfolio. That is downright evil.
It depends what the exception is.
If the exceptions are "we treat a form of income received disproportionately by the rich a 'not income' and tax it at a lower rate, and on top of that we add an extra tax on top of income tax on labor income, and cap the larger part of that extra tax, too, to avoid burdening high earners", that helps the rich, sure. But there are plenty of exceptions possible that don't do that.
The tax would be on consumption, the credit would be based on income, so Larry still pays when he buys gas (if not for his cars, then for his planes).
> I would be interested in reading a study where all the tax laws in the country were burned down and rebuilt
That would burn down the country. Tax policy and the economy are a ship that has to be gradually turned in the optimal direction, just like how for the last 40 years tax policy has been gradually redistributing growth/wealth upwards. Sudden changes (like we are seeing now with indiscriminate tariff policy) are what results in the most harm to the poor.
> Also, eliminate borrowing against a stock portfolio. That is downright evil.
Agreed, or just heavily tax borrowing against a portfolio above, say, $2M/year. That way you don't penalize working people borrowing against 401ks or taking home equity loans for home improvements.
Salary might be $1 but what is his effective income when he files his taxes? That is what he is taxed on, which includes things like dividends and selling of stocks.
It would be a good deal for the country to let the billionaire use their skills to grow wealth without interrupting it and tax them all at death.
The idea that policy makers care about this in any meaningful sense is absurd given the EV mandates, as EV's radically change the lifecycle costs of cars in a way that is absolutely destructive to people who aren't wealthy.
EV's lower the 'fueling' cost but shift part of it into large cashflow crushing battery replacement costs.
Automobiles have been a significant engine in elevating less wealthy americans because you can buy a old junky car for very little and keep it limping along with use-proportional fuel costs and minor maintenance. Even if it's an inefficient car, you use it to go to work, so you're making money to pay for the fuel. Less work, less work fuel required.
EV's significantly break the model and will push many more less wealthy people onto predatory financing which they'll never escape. Yet policy makers refuse to even discuss the life-cycle cashflow difference of EVs, and continue to more forward with policies to eventually mandate their use.
> it was almost certain to be wrong in one direction or the other, but it hasn't been updated.
It's been broken all along. We've had decades to fix it.
https://en.m.wikipedia.org/wiki/Fuel_taxes_in_the_United_Sta...
Not correct. Fuel for private aviation is taxed, including jet fuel and avgas. However, there are very few "private" jets, most are operated by some company, and therefore not private. Jet-A1 for a truely privately operated C172 with a diesel engine is taxed.
The emissions just to shuttle rich people from one side of the country to the next (For some, multiple times per day) is insane. You should need to be a billionaire just to afford flying private jets and it should still eat a significant portion of your income if that's what you choose to do.
And for what? Like, we live in the modern era, why does anyone need to travel from NY to Florida to Texas to California in a day?
These guy will never ride a subway or take a train anywhere.
TIL that US car companies won't make smaller cars in the face of different regulations, even though they made larger cars in response to current regulations.
The only way to avoid perversions is to tax the problem directly. The market will adjust to all proxies in unintended and harmful ways.
The only way to avoid perversions is to incentivize the things you want.
Taxing cigarettes led to vaping. Maybe less bad but still a nuisance.
Tax diesel more than gasoline, LNG less.
We have to come up with a rigorous alternative that doesn’t disproportionately affect lower income folk, because people tend not to be overly concerned about nebulous concepts like the climate impacts on unborn future generations, especially when my carbon impact at the margin is negligible when taken in context of global population.
Or switch to another old vehicle. Take old Golf instead of RAM, etc.
Doesn't this just punt the morass into the magic variable of one's carbon footprint?
How about this: fleet efficiency standards are stupid, anachronistic and counterproductive. Scrap them. Then, separarately, create a consumer-side rebate based on a vehicle's mileage. (Because a gas tax breaks American brains.)
It's a good concept that is also ripe for abuse with anyone who has some amount of "fuck your rules" money. Same reason why fines that don't scale with income/earnings in some form often do nothing to deter "the rich".
I certainly like carrots more than sticks, but we need a couple of sticks as well.
Criminalizing fossil fuels is insane. The fines should cover the externalities.
No, it makes it so that the outcome is more equally felt across all income levels.
What does someone affluent care if they have to pay a $100 speeding ticket or a $20 parking ticket? That's just the cost of business for them.
Because you want to... hard stop behavior. Parking violations cause harm, so the fine should be a function of damage to society, not some weird fetish to make people feel pain.
If behavior is so unacceptable that you want to prevent it altogether, criminalize it.
You think the rich suffer from pollution and car dependency? It's not at all clear that taxing gas will lead to worse outcomes for the poor. It's entirely clear that subsidizing pollution from the poor will lead to worse outcomes for the planet.
What is the difficulty with that?
Electricity from unclear source?
Human ingenuity is infinite. It is not enough to enact simple rules, people will just produce electricity with hydrogen and claim it green if it will make them profit. If it will help them evade carbon tax. Nevermind that hydrogen came from some extremely polluting process involving damaging our planet atmosphere and everyone's health.
A better question would be for imported items and services. How do you prevent tax shifting from carbon emission havens, which is no different from financial tax havens now. You tax them at entry using the most beautiful word, "tariffs". If an importing country doesn't tax carbon or carbon tariff their imports then you tariff them. Interestingly, it would then be a higher tariff for air transport than shipping. Where it actually get complicated is services, which people really don't like taxing. But if I run a LLM datacenter on coal in china or make bitcoin burning middle east oil, or consult on green projects on Indonesian gas those should be tariffed as well, and that's more difficult.
It is way harder because of reasons you mentioned. It also disincentives, e.g. composite materials with carbon in them. The materials of today and tomorrow, which would make us all richer and planet healthier, because of how much stronger carbon-nanotube reinforced concrete is.
It will disincentive fertiliser production, which can be net carbon-neutral or better.
It will disincentive carbon capture at power plants, since the tax was already paid. Graphite production.
This is my point: every policy is necessary complex. There is no "simple" and "just ..." when making policy
The proverbial blue collar truck owner is already screwed. Random surburban dude should be paying through the nose for his F-250. Create demand for fuel efficiency, and you’ll have cars like my dad’s 1993 Escort Wagon, that got 45mpg.
PS, regressive use taxes are 100% moral, fine, upstanding, and ethical.
You can’t import them unless they are old because we want to protect the automotive industry. But we can’t build them new either because they don’t meet the safety standards (FMVSS) and are penalized more for being fuel efficient because the standards are stricter for smaller vehicles.
Which means no one is getting your tax dollars to buy vehicles (though there may be some infrastructure or manufacturing grants for companies).
[1] https://www.congress.gov/crs-product/IF12600
[2] https://www.irs.gov/newsroom/tax-credits-for-individuals-wha...
If the taxes someone would otherwise pay are going to their electric vehicle instead, somebody else has to make up the difference.
So yes, other people are getting my tax dollars to buy electric vehicles. It just takes two steps rather than one, if you want to look at it that way.
What if someone declines a promotion and thus doesn't increase their income and pay more taxes? Is that also taking your tax dollars?
Sure, yes, if the government doesn't follow PAYGO[1] (which they almost never do) and offset tax expenditures (tax incentives) with reduced direct spending and government debt increases then maybe, some day, some portion of your tax dollars may get indirectly spent on this.
But how do we really know? Do we know what other secondary effects will come from these tax incentives?
If electric cars catch on maybe the government will get more revenue somewhere else (there are North American manufacturing requirements to qualify after all) or have to spend less revenue on something else (surely burning oil must have some effect).
Or maybe the person getting the electric vehicle then uses it to make more money and pay more taxes than they would have before (unlikely but possible).
But, directly, they're getting back their own money. The real issue with the credit is that it disproportionately favors people who already make a lot of money (but taxes also disproportionately tax people who make more money so maybe that's fair).
It doesn't matter. Everyone else is now paying for all the federal government services they consume. Other people are paying for that. It's literally that simple.
Second, Congress absolutely adjusts tax rates as well. Not precisely one-to-one to match spending each year, but over the long term it's all got to add up. Every dollar the government spends today is paid with people's taxes either today or their taxes tomorrow.
Third, the person who received the tax credits isn't being affected "equally". If 1% of people get the credit, but 100% of people pay for it, then the people who receive the credit end up hugely ahead in the end, while the other 99% lose out. So yes, for the 1% of people getting an electric vehicle tax credit, it is almost entirely paid for by the other 99% of people.
If the buyer's previous-year adjusted gross income is too high they still don't qualify, and if the buyer's purchase-year adjusted gross income is too high they can end up owing money to the IRS.
And dealers/sellers have to qualify and register but...
> Advance payments received by the registered dealer are not treated as a tax credit to the dealer and may exceed the dealer’s regular tax liability. Advance payments received by the registered dealer are not included in the gross income of the dealer.
That does read as a direct subsidy equivalent to a refundable tax credit straight from the general fund.
[1] https://www.irs.gov/newsroom/topic-h-frequently-asked-questi...
Or is there more to the incentive structure?
Though, of course, you don't earn interest on it while the government is holding it.
Then who is making up the difference between the tax that would have been paid, and the credit reduction?
No, it does not. See Q4 at the following link:
https://www.irs.gov/newsroom/topic-h-frequently-asked-questi...
And then you contradicted yourself 2 phrases over.
E.g. a early 2000's Nissan frontier base model was $23k in today's money. It was a somewhat better speced (e.g. more hauling capacity) and much better range, but this new car likely has significantly lower operating costs that would easily justify a 5k uplift.
So I think it ought to be perfectly viable without the subsidy, especially so long as the absurd CAFE standards continue to exist giving EV's a monopoly on this truck size.
That's why we have TeH gOvErNmEnT.
Later they made a one off version for Goodwood that has a V8 stuffed under the hood.
Maybe that's a good thing. It compelled Aston Martin to provide their customers with a fuel-efficient option.
Which was borne by its sales: sold for nearly 3 times the price you'd have paid Toyota for an iQ, it sold all of 600 units in two years before being cancelled, Aston's second shortest production run. The shortest was the Virage which sold more than 1000 units in a year.
(*Ironically, though small it has a considerably longer bed than many currently produced larger and less fuel efficient trucks... I'm mystified by trucks that can't even contain a bike without removing a wheel or hanging one over a gate. Looks like the bed on this EV is a bit short too, but a short bed on a small truck is more excusable than a short bed on a huge truck)
Consumer demand is still an important factor.
Sedans and compact cars are still out there, sitting on dealer lots with reasonable prices.
The famous 67MPG requirement was for a hypothetical 2026 model year car
But Honda discontinued the Fit in the United States in 2020, long before the hypothetical 2026 target.
The reason is consumer demand. People weren't buying them. There are thousands of lightly used Honda Fits on the used market for reasonable prices, but they're not moving.
Yes, the regulations are flawed, but that doesn't change the lack of consumer demand.
I think this over-simplifies things. Strict milage standards force a set of compromises on ICE car design that make them both shittier and more expensive[1]. Why would anyone buy such a product when they can get an SUV instead?
[1] Some examples: turbochargers, CVTs, start/stop systems. All of these increase both the cost and complexity of building as well as repairing the car. And with higher complexity comes higher chances for something to fail as well so reliability suffers.
Isn't this just a circular way of admitting that people actually wanted SUVs?
This doesn't explain why the used car market is full of very cheap cars like the Honda Fit for much less than a new SUV.
> [1] Some examples: turbochargers,
Have to disagree. These are a great way to downsize the engine and maintain the same torque output. Yes it's more parts, but modern OEM turbochargers are very reliable. If you can reduce the number of cylinders from 6 to 4 or 3, that's a net win in moving parts, consumables, and repair costs.
> Some examples: turbochargers
I disagree that turbochargers are shittier. For most people, hell even for a large subset of people that only want to race their cars on a track, turbochargers provide huge benefits. Yes, they add complexity and cost; they also vastly improve fuel efficiency, create the best torque curve possible on an ICE vehicle, and substantially improve power output. Sometimes you actually need more complexity to build a better system. I think turbochargers are a marvel of modern engineering.
And while it's subjective and admittedly more enthusiasts prefer naturally aspirated to turbocharged, I personally prefer the character of a turbocharged engine. I'd rather hear turbo whistles than a whining V10.
It's just that Americans do not buy tiny cars or tiny engines.
... and this is why American cars got so huge, if anyone was curious.
1: https://en.wikipedia.org/wiki/Corporate_average_fuel_economy...