Sunday, February 22, 2009

The Stimulus versus the Pigou Club

A reader points out this small part of the budget story in California:
A 12-cent-per-gallon increase in gasoline taxes that was initially part of the package has been eliminated -- replaced with federal economic stimulus money.
So, in effect, part of the stimulus spending has gone to fund a lower gasoline tax. The Pigou Club would have preferred a cut in, say, the payroll tax.