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IMF calls for higher gas taxes in the U.S.

The International Monetary Fund (INF) released a study today in which it called for the United States to raise its federal gas tax by 36 cents per liter or an additional $1.33 a gallon.

If adopted, these new taxes would more than triple the federal gas taxes and send the price of gas to well over $5 a gallon.

The IMF states that these are “corrective taxes” that would cause less consumption of fossil fuels. According to the IMF, “petroleum products (gasoline, diesel and kerosene) contribute to global warming through CO2 emissions and local pollution.”

The theory is if gas prices were sufficiently raised, people would drive less. The IMF lists other problems caused by gasoline use that would be solved by higher taxes. These “externalities” as the study calls them include “traffic congestion and accidents, and (primarily in the case of trucks) road damage.”
As the International Monetary Fund held meetings in Washington DC, many criticized it’s policies, saying they cause harm in many developing countries. Richard Eskow, writer and senior fellow at the Campaign for America’s Future, shares his views on IMF policies.
Eskow: IMF policies destabilize the developing world

“The time has come for subsidy reform and carbon taxation,” the IMF’s deputy director, David Lipton, said in a speech Wednesday. “The IMF will draw attention to the issue and help those who want to go forward.”

“In general, energy taxation in most countries in the world is not high enough to pay for things like the pollution in the environment, the cost of traffic congestion”-said Carlo Cottarelli, director of IMF’s fiscal affairs department, “but we don’t provide recommendations for specific countries.” .

In calculating the amount of the tax the IMF included a number of factors including the American people’s willingness to pay the higher taxes.
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