Call an end a public good, claim a social benefit, and theft via government is justified; it's considered ethical. In fact, it's considered unethical for government NOT to plunder wealth in order to produce the so-called public good.
We have moved from the ideals of freedom that founded this nation. We have allowed property to be subsumed by society, as well as it's apparatus of coercion and compulsion: government.
It is up to each one of us to continue to point out theft that occurs in the name of society. Theft is theft, no matter who receives the plundered wealth.
Sunday May 11, 2008
Pay-As-You-Drive Auto Insurance: A Simple Way to Reduce Driving-Related Harms and Increase Equity
Transportation, Climate Change, Regulation, U.S. Economy, Environment
Jason E. Bordoff, Policy Director, The Hamilton Project Pascal J. Noel, Policy Analyst, The Hamilton Project
The Brookings Institution
April 17, 2008 — This draft is subject to revision. The completed paper will be released at an event about infrastructure policy sponsored by The Hamilton Project to be held on July 17, 2008 at The Brookings Institution.
If you are like most Americans, you eat too much when you dine at an all-you-can-eat buffet. Now imagine that Americans paid for gasoline on an “all-you-can-eat” basis—paying a set fee each year for as much as they use. People would invariably drive more since there would be little cost to doing so. The idea may seem absurd, but that is how auto insurance is priced today. Drivers who are similar in all respects –age, gender, driving record –pay roughly the same premiums whether they drive 5,000 or 50,000 miles per year, even though the likelihood of being involved in a collision increases with each mile driven. (Some firms do offer a modest discount for driving below a certain number of miles, but even that is based on a self-reported estimate.) And just as people consume more when they do not bear the cost of the extra food, so too do they drive more when they do not bear the cost of the additional miles driven. The increased driving that results imposes significant costs on society: more traffic accidents, increased congestion, decreased air quality, growing greenhouse gas emissions, and deepening dependence on oil. The current system is also inequitable, as low mileage drivers (particularly low-income people and women) subsidize the accident costs of high mileage drivers.
A better approach is simple and obvious: pay-as-you-drive (PAYD) auto insurance. With PAYD, insurance premiums would be priced per mile driven. Pricing insurance per mile is more equitable, as low-mileage drivers would no longer subsidize high-mileage drivers. And with insurance costs that vary with miles driven, people would be able to save money by reducing their driving, thereby decreasing driving-related externalities like carbon emissions and congestion. PAYD is a simple and pragmatic reform. Moreover, it is more politically feasible than alternatives like a gas tax because PAYD does not increase the cost of driving in the aggregate; it saves money for those who drive less than average, shifting the cost to those who drive more, and thus are responsible for more driving-related harm. And since geography is already a key risk factor in pricing insurance, those in rural areas where people drive more will not be disproportionately impacted because their premiums will be determined relative to how many miles the average driver in their area drives.
With insurance costs that vary with miles driven, we estimate that drivers nationwide would reduce miles traveled by an average of 8 percent. To put that in perspective, it would take a one dollar increase in the gas tax to achieve an equivalent reduction in vehicle miles traveled (VMT). An 8 percent reduction in VMT would yield social benefits of $51.5 billion, largely from reduced congestion and accidents. It would reduce carbon emissions by roughly 126 million tons per year, which equals 8.4 percent of the carbon emitted by cars and trucks. And PAYD can achieve these gains while actually reducing the cost of driving for most drivers. Roughly two-thirds of households would enjoy reduced premiums under PAYD, and the average savings for those two-thirds of households would be $270 per car per year, equal to 28 percent of the average annual U.S. car insurance premium.